Issue link: https://maltatoday.uberflip.com/i/1515420
maltatoday | SUNDAY • 4 FEBRUARY 2024 6 INTERVIEW Abigail Agius Mamo: 'No intervention in a healthy, free and competitive market' BUSINESS organisations were not too happy with the price stability scheme gov- ernment pushed onto retailers and import- ers to bring down the price of some foods. The Chamber of SMEs was among those that called out what they described as gov- ernment meddling with the free market. But the same organisation supported gov- ernment 'meddling' in the energy sector through hefty subsidies to keep electricity prices stable. When I put this apparent contradiction to Abigail Agius Mamo, CEO of the Cham- ber of SMEs, she draws a clear distinction between the two sectors. Sitting in the boardroom of the Cham- ber's Floriana office, she tells me the food sector is rife with competition and rather than fix prices for a few products, govern- ment should have adopted other strategies to counter inflation. The Chamber has suggested cutting VAT to 15% on all prod- ucts and services and the removal of excise tax on personal care products, water and non-alcoholic beverages. "By cutting VAT, government would still collect the revenue it used to before infla- tion peaked and it would have a broader impact on lowering consumer prices," she says. As for the energy sector, Agius Mamo justifies government intervention on the basis that there is no competition in the sector. Malta has only one energy supplier – the state-owned firm Enemalta. Agius Mamo argues the subsidies on en- ergy and fuel are crucial for businesses to remain competitive. She is unfazed when I point out that gov- ernment is facing increased international pressure from the likes of the IMF and the European Commission to phase out these subsidies. "When these organisations come to Mal- ta they think with the mentality of a large country where multiple sources of energy exist," she tells me. However, she says the recommendations made by foreign organisations are based on the need to ensure public finances are strong. "This is not something we can ig- nore but international oil prices have been falling and the stress on public finances from these subsidies is now less than it was several months ago," she adds. Agius Mamo believes the extension of the emissions trading scheme to the shipping sector last January is bad news for Malta. For her it is not just a question of added costs on imports and exports as a result of the carbon surcharge but also hits at Mal- ta's trade connectivity. Ships can opt to bypass Malta and head instead to north African ports where they are not subjected to ETS, she warns. Malta can lose important sea connections and ex- perience reduced frequency in ports of call that could lead to shortages. For almost 10 years, Abigail Agius Mamo has captained the Chamber of SMEs, one of the leading business lobby groups. She sits down with KURT SANSONE to discuss, among others, inf lation, the pressure from foreign organisations to phase out energy subsidies and Malta's risk of losing maritime trade connections.