While the finance minister’s statements that a planned green fuel tax would not be going ahead for now is welcome news for motorists, it is likely that is only going to be a temporary reprieve.
Far from wanting to pick holes in the comments made at the Economist Conference by Constantinos Petrides, one of the few ministers who doesn’t try to sugarcoat everything, but there are other green taxes coming down the line for consumers that they might not be aware of yet.
The bill containing the fuel tax, that was to be passed by the House by the second quarter of 2023, according to the Recovery and Resilience Plan (RRP), also known in utopia-speak as the ‘Cyprus Tomorrow’ plan, contains two other green taxes, one on household waste and the other a new levy on water consumption.
The minister did not allude to these in his speech, though he has said on a few occasions recently that some of the policies in the green transition blueprint might need to be revised due to inflation and the energy crisis resulting from the war in Ukraine.
He is clearly aware that the public can’t take on the burden of some of what are called the ‘malus’ measures (financial penalties), as they are referred to in the RRP, according to which, for instance, the fuel, water and waste taxes are not necessarily about raising funding for green energy projects. The wording suggests they are primarily designed to force people to use less energy, which of course can be argued is a necessary and good thing for the planet.
Inevitably however, such measures end up making life more difficult for low-income households, large families that by default use more water and produce more waste, and for the elderly who barely get by as it is. The RRP promises to offset the cost to vulnerable groups. The question is will it be enough?
In the meantime, for the well-off, it will be business as usual, a bit like the participants of UN climate conferences flying in on private jets while air fares for the masses go through the roof.
Take for example, the coming EU ban on all emissions-producing vehicles from 2035. Cyprus foresees that 40 per cent of vehicles will be electric by 2030. That’s seven years away but also leaves only five years to change the other 60 per cent to EVs, the price of which, even with a government subsidy, is still prohibitive for most.
The Cyprus government’s incentives for people to scrap dirty vehicles, other than buying an EV, are to help them purchase an electric bicycle or give them free bus tickets, which is a bit of a joke given our public transport.
Petrides is correct that some of the green polices should be revised, or at least spread out over a longer period. Otherwise, the gap between the haves and the have-nots is about to widen to the point where incentives will be needed to buy a donkey and cart.