Citizens' concerns after the cut of state support, the new regime and the lurking green tax
It's a more expensive start to next month, as a result of the end of the government's zero-rate measure on diesel and petrol, which increases the cost of motor fuel by 8.3 cents/litre. The cost of travel, as an important fund for the family budget, is expected to burden the rest of the purchasing habits of consumers, so that from April 1, the rest of the retail trade will also be affected. At the same time and according to estimates, the prices of goods are expected to increase.
What is recorded, since the government announced the package of targeted measures against precision as a compensation for the abolition of the horizontal support for fuels, are the complaints of the middle class of citizens for ignoring their needs.
At the same time, in view of the green tax that is expected to be imposed between October and November, both households and businesses are worried and expect the State's intentions for compensatory measures to be clarified in time.
The landscape
Describing a negative landscape for citizens the day after the end of the horizontal fuel measure, the economist Tasos Yasemidis quoted the following data in his statements to SPOR FM and the DISTRIBUTION NEWS broadcast:
- There is no public transport, which allows its use by citizens, or perhaps it is not part of their culture, so the majority of citizens will feel the increase in fuel.
- Cyprus was far behind in RES.
- A large part of the products, even from the primary sector.
Is the middle class justly protesting?
Sharing, firstly, the fact that the government has taken into account the admonitions of the European Commission, but also of the IMF, not to proceed with horizontal measures, such as the extension of the fuel measure, even though, in his opinion, it will could be phased out, because the above admonitions mention a gradual phase-out within 2024, and secondly that these measures cannot continue indefinitely and replace market forces in an economy, at the same time Mr. Yasemidis finds that the middle class, which faces serious problems, is left out of support. “If the government and the state came up with a plan that would involve relief for businesses and citizens through the tax system, with some bonus policy and some other measures, the voices of protest would be much less today,” he stressed.
At the same time, he called it disingenuous for the government to refer to the economic situation of 2013, noting that today the facts are different and indicating that such references should not ignore the psychology of the economy.
Green taxation awaits
In October – November, green taxation will be imposed, with citizens not having yet to hear what the compensatory measures will be.
This new taxation will find a large part of the population, the middle class, weakened, Mr. Yasemidis emphasized. “That's why we should now start to see how these compensatory measures will take place. We have heard a lot of ideas, both from the Ministry of Finance and from the opposition parties, what remains is for them to pass into the bills, so that we do not find ourselves again, as we usually find ourselves, in the position of having to implement a piece of legislation, without we are ready for the compensatory measures”, said Mr. Yasemidis.
Citizens' questions
Indicative of the concern prevailing these days in society, after the government's decision to end the horizontal support for fuel and to proceed with the announcement of targeted measures, is the nature of the questions with which citizens are bombarding consumer associations these days.
The first question concerns whether and how the state will recover these subsidies that it announced and said will apply for the coming months, Ms. Eugenia Christou, on behalf of the Cyprus Consumers' Association, told SPOR FM. “The answer is clear, with the abolition of the fuel subsidy, the government will have revenues of 6 million euros per month. Therefore, if we take into account that the total support package amounts to 35.3 million euros, in practice this means that the government within six months will manage to recover the amount, which it will pay for these subsidies”, he noted.
The second question is in relation to what will be done with the heating oil. “We make it clear to consumers that the heating oil subsidy ends on April 15, 2024. After that date the 6.2 cent increase will be seen. Of course, the fact that the weather conditions are improving is positive for citizens' concerns”, said Ms. Christou.
The fuels and the “half truth”. cheapest in the EU on 95 octane petrol and the fourth cheapest on diesel. This is actually true, but it's only half the truth. You cannot come and compare Cyprus with other countries, where the standard of living is different. And let's not forget that in other countries there is a satisfactory public transport network, something that does not exist in Cyprus. So when we refer to fuel, we should be very careful in what we say,” he said.
