THERE has been no increase in the cost of living, Commerce Minister Antonis Michaelides claimed yesterday.
Speaking before the House Finance Committee, Michaelides refuted deputies’ concerns over the increase in the cost of living. “There is no increase in the cost of living. This can be seen by the increase in inflation and state income,” the minister said, suggesting inflationary trends and rising tax returns were the result of consumer confidence and greater wealth, and adding that increases in certain products were due to international prices.
DISY deputy and chairman of the House Commerce Committee Lefteris Christoforou condemned the minister’s claims.
“At the time when the Cypriot consumer and the Cypriot household is suffering from the increase in basic products and the cost of housing is shrinking his income, the government has chosen an especially insulting and provocative way of handling the social problem, reaching the point of stating that there has been no increase in the cost of living,” the DISY deputy fumed.
He added that Michaelides’ statement only served to confirm that the problems had no impact on the government, which would rather turn a blind eye than solve them.
“When the government came into power, income from tourism made up 18 per cent of the Gross Domestic Product (GDP), which has now reduced by 30-40 per cent, taking it to 12 per cent of GDP,” said Christoforou.
In response, Michaelides said the only acceptable statistic was that of inflation, which had increased from 1.8 per cent to 2.3 per cent.
He added that the government had difficulties regulating price increases due to the operation of free competition.
Referring to an observation that oil and gas prices seem to increase a lot easier than they decrease, Michaelides said the Commission for the Protection of Competition (CPC) was in the process of completing an investigation into the matter.
Asked why the government refused to reduce heating fuel duty to 0.01 cent a litre, Michaelides said Cyprus actually had the lowest duty allowed by the EU.
Finally, the minister said the government was aiming to attract tourists with higher purchase power in a bid to improve the sector.
TURNING Cyprus into a high tech attraction centre for foreign investors is the Commerce Ministry’s main objective for the 2008-2010 period.
This was Commerce Minister Antonis Michaelides’ opening line during discussions of his ministry’s 2008 budget at yesterday’s House Finance Committee.
The ministry’s budget for 2008 has been set at £41,094,790 – £2,003,143 higher than the previous one – and it includes £11,758,530 for regular expenses and £29,336,260 for development expenses.
Referring to concerns over the drop in tourism, Michaelides said Cyprus was a mature holiday destination and, under the circumstances, was dealing well with the problems that tourism is facing in general.
He added that tourism-related income had increased in the past four years.
Michaelides assured deputies that his ministry was making good progress in the development of golf courses, while he announced that the contracts for Limassol marina would be signed by the end of the month. Within the next five years, he added, Cyprus would have four modern marinas.
Regarding the arrival of liquid natural gas to Cyprus, Michaelides reminded the Committee of the Cabinet’s June 6 decision to speed up proceedings for the creation of a land-based liquefaction terminal.
He also repeated the government’s decision to examine ways of building an offshore unit – something to which unions at the Electricity Authority of Cyprus (EAC) are categorically opposed.
Responding to DISY president Nicos Anastassiades’ recent accusations that President Tassos Papadopoulos’ law firm was directly implicated in the LNG saga, Michaelides said: “It would have been the scandal of the century if the construction, costing £400 million, was completed much sooner than we receive the natural gas.”
But he pointed out that the government was not willing to go ahead with the floating option unless it had substantial evidence that it was to the island’s best interests.
