The subsidies being currently forked out by the public exchequer relative to the current price of fuel and electricity are substantial. Until mid-July subsidised fuel was also available for use by large seacraft. Through a legal notice effective on the 29 July the Finance Ministry tweaked the subsidy rules to stop this. This was a correct step to take.
This tweaking of fuel subsidy rules was a good step in diverting subsidies from being mis-used for non-essential purposes. The subsidies currently applied to fuel and electricity exceed the sum of one million euro per day. In fact, they are getting closer to one and a half million euro (€1,500,000) per day.
Prime Minister Robert Abela is on record as stating that it is not easy to limit subsidies from being used by the wealthy and the wasteful. I agree that decision-taking is never easy. Especially when limiting access to benefits such that those who are not in need and the wasteful do not end up being subsidised by the state!
It is however possible to seriously consider limiting the fuel and electricity subsidies to be used only by those who need them. Such a limitation would ensure that more funds are available for those who really need them. It would reduce the need to curtail expenditure on education or other useful areas/projects to make good for the subsidies.
Reducing expenditure on university education, as government is planning to do through a reduction in its operational budget, penalises future generations. Future generations are already burdened with the accumulated national debt, with the depletion of natural resources and with the continuous ruining of our national heritage. We should not make matters worse than they already are.
Existing subsidies could be further tweaked.
Subsidies on petrol and diesel could be reduced until they are completely eliminated. This would have the additional benefit of less cars on the road as increased petrol/diesel prices would inevitably shift more of us to make more use of public transport. We should remember that a substantial amount of private car use can be avoided as it is for short distances. This has been clearly emphasised in the National Transport Master Plan which states that 50 per cent of car trips in the Maltese Islands are for short distances of less than fifteen minutes duration. Public Transport can offer the reasonable alternative in these circumstances, in particular being free of charge as from next month! It must however improve its reliability as well as its efficiency. It should also aim to reach as many localities as possible, including through an efficient night service.
In these circumstances reducing gradually and eventually removing subsidies on petrol/diesel could be the way forward.
The issue remains as to those economic areas which are dependent on petrol/diesel. In these cases, government should identify suitable focused aid which addresses the specific needs of the economic areas under consideration.
Similar considerations should apply to subsidies currently applicable to electricity.
Basic domestic use of electricity should remain subsidised. Beyond that, however, it would make sense to focus the required aid to industry and business in a focused manner, in tailor-made fashion. This would make much more sense than a blanket policy of subsidies across the board.
Increased emphasis on assistance to generate and make use of renewal energy should continue to be a priority. An increased effort must be made to generate more renewable energy through an efficient use of the roofs of public buildings as well as, wherever possible, adequate use of public open spaces. Coupled with an increased expenditure on improvements to the electricity distribution system this could reduce the impacts of this energy crisis on the Maltese taxpayer in a substantial manner.
Helping those in need is a priority. In should however be done in a sustainable manner! Spending more than one million euro per day on these subsidies is definitely not sustainable.
A sustainable vision is the way forward. It is in the interest of all. This is in the interest of both the present as well as future generations. The choices we need to make are tough. It is only if we get our priorities right that we can plot the way for a sustainable future.
published on The Malta Independent on Sunday: 18 September 2022