Issue link: https://maltatoday.uberflip.com/i/1379276
8 maltatoday | WEDNESDAY • 2 JUNE 2021 ANALYSIS JAMES DEBONO FOR the first time in a long time the Na- tionalist Party may have struck a chord on a 'bread and butter' issue with a pledge to refund €50 million to consumers who could have been paying more than was due on electricity consumption since 2013. The campaigb has provided the PN an opportunity to ground this kind of commit- ment in a critique of the government's en- ergy policy, which is marred by suspicious deals involving Electrogas and Chinese gov- ernment-owned Shanghai Electric – even if the PN still shies away from any clear commitment on what it intends doing with these deals once elected. Now the PN can pander to those voters who prioritise bread and butter issues with- out alienating anti-corruption activists. Signing up for what? The PN's demand is based on an extrap- olation from a draft report by the Auditor General which found that consumers could have paid "extra charges" totalling €6.5 mil- lion on their electricity and water bills in the period analysed. But on Saturday the PN went a step fur- ther by calling on people to register "an interest" by presenting their ID cards and electricity bill account number. Hundreds answered the PN's call in a ra- re event outside the party headquarters, for a cause championed by the party. In a way the party got to partly exorcise recent mem- ories in which the Dar Centrali became as- sociated with internal strife, contentious internal elections and gatherings in which rowdy supporters of former party leader Adrian Delia stood by their leader in the various attempts to unseat him. Yet by calling on people to gather outside the headquarters the PN found itself draw- ing comparisons between its actions and a similar campaign by Labour one year after Muscat was elected party leader and in the run up to MEP elections in 2009. But beyond the similar optics, some differ- ences are striking. The first difference of note is that in 2009 people were signing in for an actual class action in a court case urging the govern- ment to refund the VAT over-charged on their car registration tax. Surely Labour's 2009 campaign smacked of opportunism. Since Malta lacks a legal tradition of US style 'class actions' the legal campaign itself fizzled out, with Labour using it as a prelude for an electoral commitment to refund the monies anyway, in a staggered way after it was elected in government in 2013. But while in 2009 the crowds gathering in front of the PL headquarters were at least given a reason for signing in, those answer- ing the PN's call last Saturday were simply registering an "interest" in a refund scheme to be launched by a future PN government. Since everyone who was overcharged by ARMS would be eligible for a refund, it is not clear how people will benefit by provid- ing the PN with their own personal data, which may well be used for other reasons. To justify the collection of data, the PN may well consider providing all those sign- ing in to this initiative with a clear break-up on how much they have been over-charged. But here lies another potential pitfall of the campaign. While it was easy to calculate the VAT paid on car registration, calculat- ing the over-charging of electricity and wa- ter bills is more complicated. Moreover a sample of electricity accounts taken by the NAO found a variance of more than €10 in 32 of the 85 accounts reviewed. The range in the difference between pro-ra- ta and annual billing was between €10.74 and €468.90. The latter amount was said to relate to a user with heavy electricity con- sumption. Moreover, 46% of the analysed accounts did not reveal any significant vari- ance between the two billing methods, with the difference between the two calculations being less than €2. So telling people the amount due to them may backfire among those eligible for a refund of small amounts. And one major disadvantage for the PN is that despite the over-charging – which ranges from the minimal to the substantial – a large segment of voters still recall the hike in energy bills under the Gonzi admin- istration and the substantial reduction im- plemented by Labour upon being elected. While Labour's commitment was legit- imised by a statement by the European Commission that VAT should not have been charged on registration tax and con- firmed by decisions of the European Court, the NAO report in this case is preliminary and conditioned by pending court cases instituted by citizens claiming being over- charged by ARMS. Are refunds based on social justice? Another more political question is how disbursing €50 million as promised would impact on a future government's budgetary policy and it makes social justice sense to commit such an amount when it could be used for those who can't afford paying their bills, rather than compensate heavy energy users and owners of second homes. While Labour's 2009 campaign was effec- tive, it was never legally established whether government was legally obliged to issue the VAT refund on car tax. For what the gov- ernment was legally obliged to change was the system. As was the case with Muscat's commitment in 2009, the PN can justify its position by saying that it is simply refund- A leaf from the Muscat playbook: the PN's utilities In 2009, newly-elected Labour leader Joseph Muscat called on citizens to sign up to a class action on a VAT refund on car registration tax. Now Bernard Grech is urging the public to 'register interest' in a pledged €50 million refund on electricity tariffs. Will he be as effective?