Last week the government decided to extend the reduction in the petrol tax until September 17, at an estimated additional cost of €3.5 million. The tax reduction was to have ended at the end of August, but the government, in a ludicrous decision, extended it for 17 days, supposedly, following discussions with the political parties. We suspect some parties made this demand and the government satisfied them as nobody would be protesting about the lower tax for two extra weeks.

Apparently the parties had wanted the tax-cut to stay in place until the legislature reconvened after the summer break. What on earth could have been the rational justification for such a request, other than the fact the parties would ask the government to extend the tax reduction for a few more months – perhaps until the end of the year – if prices had risen by then. The funny thing was that the 8.33 cents per litre tax cut for unleaded petrol was meant to have come to an end at the end of June, but the government charitably extended it for another two months.

It is after all a people-pleasing measure, of the kind the government specialises in, and it is a partial response to all those protesting about the high cost of living and government failure to protect people. The irony is that the fuel tax cut is of greater help to people with high incomes, who have big cars that consume more petrol. The benefit for people on low incomes, with small, economical cars is very small and certainly not enough to protect them from the rising cost of living.

This is more a populist gimmick rather than a measure aimed at safeguarding living standards. What is worse is that the government has set a very bad precedent, by systematically using the ‘temporary’ reduction of taxes as a policy tool. It has also cut VAT on some basic goods to zero ‘temporarily,’ although this temporary measure will be in place for longer than a year. It had also cut one of the tax levies on electricity bills, as part of this economically unconventional ‘consumer protection’ policy.

The sooner this bizarre practice, which helps the well-off much more, in absolute terms, than it helps people with low incomes, ends the better. People have survived times with high fuel prices in the past without tax cuts being imposed and they could have done so this year. The funny thing is that these tax cuts were supposed to be in place for a few months, the finance minister, Makis Keravnos, insisting that blanket measures were wrong and that measures should be targeted at vulnerable groups.

Untargeted measures, however, have become the norm under the Christodoulides government, because they win political brownie points and nobody seems to care that they help the rich rather than the poor.