The government rejects the bill proposals tabled to halt price increases with laughable arguments

Statement by AKEL MP Aristos Damianou after the meeting of the Parliamentary Finance and Budget Affairs Committee

6 June 2022

In today’s Cyprus, consumers are anxious, as we are suffering from energy poverty. The cost of living is high, whereas profiteering in relation to fuel prices is evident.

Given the wider situation in the real economy, AKEL considered it appropriate to table a number of proposals, including the two bill proposals on fuel prices.

The first bill proposal concerns the possibility of the Minister of Energy setting ceilings on fuel prices, which we expect to be discussed in the Parliamentary Trade Committee as soon as possible.

The second bill proposal, is the one we discussed today in the Finance Affairs Committee concerning the abolition of VAT on excise taxes, with a timeframe of December 2022.

We of course didn’t expect a different reaction from the Government and the Finance Minister, when we heard today that both of our proposal, as well as the proposals of other opposition parties too, which are moving in the right direction, regardless of the differences between them, have been totally rejected by the Government.

Indeed, some of the arguments put forward by the Minister are worthy of consideration and comment. The Finance Minister is concerned that if excise taxes are reduced, the purchasing power of households will increase! What audacity! Consequently, he says, inflationary trends will increase and de facto inflation will continue to rise.

If the Minister thinks that inflation will be controlled through impoverishing the lower middle and middle strata, then I am afraid that this narrative about the President acting as a “good helmsman” is finished.

The Finance Minister’s second argument is that our proposals are unworkable, and therefore the rich will also benefit together with the poor. Such a concern by a Finance Minister of the Anastasiades – DISY government, whose policies in their majority serve the few but rich and not the many of the lower and middle strata, can only provoke laughter. After all, their work and record on a model based on the construction of towers and the ‘golden’ passports scheme are a stark example of this reality.

Of course, under the pressure arising from the debate, it has been said, and we are pleased to note this, that the Finance Minister would be prepared to enter into a dialogue around our proposals, provided that they could be targeted measures. But at the same time, we are obliged to say say that this shift from their original position is due to the vindication of our position. That is to say that a large number of member states of the European Union have made significant interventions, and even horizontal interventions, both with regards excise duty and compensatory benefits.

And of course the confirmation came from the Ministry of Finance itself, when we suggested that seven member states had made specific regulations and the competent Ministry in a letter gave us a list, one and a half pages, of the actions/measures taken by member states that our government refuses to take.

Another confirmation of the government’s refusal to address the problems in the real economy, with the vulnerable groups of the population, the lower middle classes, is the reply it itself gave to a question we posed, regarding the actions that the government had taken, when in December 2021 the possibility of greater flexibility, in relation to VAT rates more broadly, but also more specifically in relation to fuel, was discussed in ECOFIN.

In response to AKEL’s question on what the government had actually done back then to assert from the European Union, the answer, which is also in writing and indicative of the callousness of the government ruling forces, states among other things, “…the Ministry of Finance will study the framework of reduced rates after the publication of the derogations of other member states and will make appropriate recommendations in order to achieve the maximum benefit for citizens and businesses.” In short, promises that we know that they won’t materialize…

At a time when citizens are struggling το make ends meet, at a time when fuel prices have skyrocketed, the government will wait to see how the measures taken by other countries are made public before it will act.

Well, citizens will act in February 2023, since this government doesn’t act.