Issue link: https://maltatoday.uberflip.com/i/1510993
18 maltatoday | SUNDAY • 5 NOVEMBER 2023 BUDGET2024 NICOLE MEILAK GOVERNMENT will spend around €320 million in fuel subsidies every year until at least 2026, or until Malta fixes its electricity supply. In a press briefing ahead of the budget, Finance Minister Clyde Caruana explained that the government will bring the unit cost of electricity down before it can start phasing out the costly fuel subsidies. He said this will be done through investing in offshore renewable supplies and a sec- ond interconnector. But in an environment where fuel and electicity have been politically contentious, is the government's decision to sub- sidise energy feasible in the long-term? MaltaToday asked two former Enemalta chair- men for their opinion. Robert Ghirlando, a profes- sor of engineering, said that he is against the indiscriminate application of the subsidy, in- stead wondering if the gov- ernment should use different measures to prevent fuel pov- erty. "In the UK, the government was giving a subsidy to pen- sioners struggling with the cost of living. What would happen if the government were to, say, widen the tax bands instead?" He also pointed to the wa- ter tariffs offered in Malta, where basic water consump- tion is billed at subsidised rates whilst, beyond that amount, commercial rates apply. "One of the biggest issues is not talking about energy con- sumption," Ghirlando point- ed out. "We speak very little about the need to reduce con- sumption. Not by reducing the standard of living, but meas- ures to improve energy effi- ciency." He also said that the blanket subsidy on energy contradicts other efforts to push for sus- tainable energy sources. "We keep pushing for decarboni- sation, yet we subsidise petrol and diesel. Should we start subsiding waste?" Charles Mangion, the Labour Party's former finance spokes- person while in Opposition, says the fuel subsidies are an important stabiliser to pro- mote economic growth and safeguard businesses, consum- ers, and families. "I think that, as long as the country can tolerate it, those subsidies should continue. Whether modification will be needed, only time will tell." Mangion described the subsi- dies as an anchor to keep sta- bility, but whether the subsi- dies can be feasible in the long term depends on the circum- stances of the time. "The future is so unstable; one needs to adjust to the circumstances. Will Russia go back to its former border? How will the switch from car- bon energy take place? All of these are discussions that will need to be addressed." Energy's political implications Oil, gas and electricity have been political points of con- tention that transcend political cycles. The 1996-1998 Labour gov- ernment was pilloried when it revised electricity tariffs up- ward as part of an austerity programme to fix Malta's debt problem. Roll forward 10 years and in 2008, when Austin Gatt, who was a minister at the time, introduced a surcharge on utility bills because of the international rise in the price of oil. The price hike became a troubling factor for the Nationalist Party in gov- ernment, spurring protests and widespread disgruntlement. Enemalta was eventually downgraded by credit ratings agency Standard and Poor, as a result of the large debt the corporation had accumulated. In 2013, MaltaToday broke the Enemalta oil scandal, which shed light on corruption in oil purchases by Enemalta. Energy then became the sin- gularly most important policy plank of Labour for re-elec- tion, promising a gas plant and a 25% cut in household and business energy bills. But the scandal around en- ergy and electricity didn't sub- side. In 2017, Daphne Caruana Galizia reported on an elusive company called 17 Black, de- scribing it as "the company which those crooks use to move money in and out of Du- bai". Later that same year, The Malta Independent published a story claiming that an inves- tigation by the FIAU found 17 Black had received money from the agent of the LNG tanker in Delimara. Years later, energy remains a suspected motive for why Daphne Caruana Galizia was assassinated, with her report- ing on 17 Black being linked back to the alleged master- mind of her murder, Yorgen Fenech. ANNOUNCEMENT OF A CALL FOR PROJECT PROPOSALS UNDER The European Regional Development Fund 2021-2027 The Ministry responsible for European Funds would like to announce that it is launching a call for project proposals in the following area: Priority 3: PO 4 - A more social and inclusive Europe implemen ng the European Pillar of Social Rights RSO4.6 – Enhancing the role of culture and sustainable tourism in economic develop- ment, social inclusion and social innova on (ERDF) This call shall be open to Ministries, Government Departments and Public Sector en es and shall specifically focus on the protec on, development and promo on of cultural heritage and cultural services. The call will close on 16 th February 2024 at noon. The online applica on form for the submission of project proposals and suppor ng documen- ta on are available on h ps://fondi.eu/what-funding-is-available/. Prospec ve applicants are encouraged to refer to the European Regional Development Fund, the Cohesion Fund and the Just Transi on Fund Programme and the Eligibility Guidance Notes to confirm whether their proposals are eligible for funding through this call for project pro- posals. Further informa on on this call and other calls may be obtained from h ps://fondi.eu/. Any query should be sent by email on fondi.eu@gov.mt. A dedicated informa on session is being organised on Friday, 12 th January at 14.30 at the of- fices of Servizzi Ewropej f'Malta – 280, Republic Street, Valle a. For further details kindly visit the website indicated above where all the call related documenta on is available. Fuel subsidies till 2026 – is this feasible? Robert Ghirlando (left) and Charles Mangion