All eyes are set on the meeting of the Malta Council for Social and Economic Development (MCESD) that will be meeting this afternoon to discuss the utility tariffs’ hike that was introduced from January 1, this year.
Sources close to the meeting told Business Today (BT) that during the meeting, which will be held at the Phoenicia Hotel at 3pm, MRA Chairman Ruben Balzan will be presenting the workings of how the utility tariffs had been worked.
Finance Minister Tonio Fenech should be attending the meeting, apart from Parliamentary Secretary for Consultation Chris Said, who is politically responsible for the MCESD.
The MRA’s lack of consultation prior to the publication of the tariffs and its refusal, until now, to discuss with the social partners the workings of the tariffs has angered both Unions’ and employers’ organisations.
Therefore the MRA will be facing some tough questioning on the workings methodology, especially by employers’ organisations as the tariffs approved by the MRA mean a hefty increase of between 40 per cent and 70 per cent in energy costs.
Employers have already warned that if some form of mitigation measures to alleviate the burden on industry was not offered, thousands of jobs were on the line.
Speaking to Business Today, Malta Employers’ Association (MEA) Director-General Joseph Farrugia called for “a show of transparency by the MRA about how the tariffs are being computed”.
“Our main concern is that with the way in which the tariffs are being revised, the cost of electricity for commercial users will be the most expensive in Europe which will make it difficult for many Maltese businesses to remain competitive,” Farrugia warned.
There was also the danger, the MEA boss added, that the revised tariffs would generate “further inflation which will mean that employers will have to fork out additional cost of living increase for 2011”.
The tariffs were “a source of uncertainty which is definitely having a negative effect on business and which threatens to prolong the recession in Malta,” the MEA Director-General told Business Today. Farrugia insisted that the MRA should also have been “more sensitive to the manner in which such revisions are announced.
“We had advised government to announce the new rates after the budget and not leave them pending close to the Christmas season,” the MEA Director-General told Business Today.
“As it turned out, the new rates were announced precisely a week before Christmas which has contributed to a hesitant purchasing attitude by many consumers,” he lamented.
Asked whether the MEA would be making any proposals to alleviate the burden on private enterprise, Farrugia told Business Today: “MEA does have its proposals which will be made public during the MCESD meeting”.
Other employers’ organisations were tight-lipped about the MCESD meeting, preferring not to comment when asked by BT.
The Malta Chamber of Commerce, Enterprise and Industry (MCCEI), through a spokesperson, said it would “not be making any further comments in anticipation of Wednesday’s meeting”.
The MHRA said that it would not be making any additional comments to the ones which they had already given to BT about the matter, while the GRTU did not reply to our various e-mails and SMSs sent over the past two days.
On their part, the Trade Unions’ were expected to take a tough stand against the threatened redundancies, while insisting with the Government to shoulder the impact on low and medium-income families.
Speaking to Business Today, Union Haddiema Magħqudin (UĦM) Secretary-General Gejtu Vella strongly condemned the threats made by hoteliers and other employers to support their case about the utility tariffs.
“These threats will lead to the creation of industrial unrest and trouble in hotels and other places of work, as well as for industrial unrest at a time when social dialogue should be the effective instrument to face these difficulties,” Vella told Business Today.
The UHM chief insisted that in an industrial democracy, the MCESD should be the proper forum where social partners could thrash the economic problems while safeguarding effectively the social aspect.
Vella recalled that for a number of years, residential consumers had subsidised the water and electricity consumption for hoteliers as well as for other businesses.
“Moreover, during the past few years, workers in the tourism sector had made various sacrifices, with various collective agreements in the sector not getting revised,” the UHM boss added.
“The UHM had also supported the proposal made in the MCESD that the Government allocates €2.5 million in a fund to assist retailers, hoteliers and other industries that might be badly hit as a result of the tariff hikes, Vella told Business Today.
He appealed for “reason to prevail again” in today’s MCESD meeting and augured that the discussion would “not be motivated with threats of redundancies”
On the other hand, FOR.U.M President John Bencini was rather pessimistic in his outlook. “FOR.U.M is not expecting much from Wednesday’s meeting.
“FOR.U.M believes the meeting will only end in Government’s rubber stamp to the tariffs as already announced,” Bencini told Business Today.
The Government would “not move an inch,” the FOR.U.M. President told Business Today.
“Perhaps as a camouflage, Government might promise to assist industrialists and hoteliers who would be facing the most difficulties or others who will threat to give workers the sack,” he insisted.
Asked about FOR.U.M.’s proposals to alleviate the burden of the utility tariffs on workers as well as enterprises, Bencini told Business Today: “Unfortunately FOR.U.M cannot make any specific proposals because Government is still resisting FOR.U.M from forming part of MCESD for reasons unknown.”
Bencini told Business Today that today’s meeting was “indeed strange because MCESD will be discussing the water and electricity tariffs that have already become operational as from 1 of January.
“The meeting should have taken place before that date. All Social partners are once again being taken for a ride,” the FOR.U.M President charged.
No replies had been forthcoming from the General Workers’ Union (GWU) and the Confederation of Maltese Trade Unions (CMTU) by the time we went to print yesterday evening.