DEPUTIES once again discussed the high cost of living at the House commerce committee yesterday. This discussion takes place every few months and features deputies complaining about high prices, which they blame ‘profiteering’ businessmen, warning that standards of living were falling and demanding action from the government.
Now, they have stumbled on a new solution to the perennial problem – the appointment of a Commissioner for the Protection of the Consumer. The proposal was made by the EDEK leader and has the backing of most parties as they believed that government departments, despite the best intentions, were incapable of protecting the consumer from ruthless profiteers.
But how would a commissioner protect the consumer? Would the law give the commissioner the powers to investigate the pricing decisions of private companies and declare them ‘profiteers’ or would he or she issue directives ordering a supplier to lower a product’s prices? And which products would come under the commissioner’s scrutiny? Would it just be basics, such as bread, milk, meat and fuel or would the office also examine air-fares, hotel rates and restaurant wine prices?
Given the general ineffectiveness of the office of the Commissioner for the Protection of Competition, over the years, what is the basis of believing that a consumer commissioner would make any difference? The former takes months, sometimes years, to investigate a case, and on completion of the report the lawyers take over, further delaying the final outcome. It will take months before findings of the investigation into a possible milk-suppliers’ cartel are made public, even though the Commission has issued its report.
For a consumer commissioner, things would be even more difficult, as he or she would be intervening in the operation of the market. In the end, the only thing the commissioner would be able to do is to investigate complaints against a shop’s returns policy and discounts. There is no way an institution like this would stop the rise of the cost of living.
The cause of the problem is not profiteering, even though there are suppliers who work with very high profit margins, but constantly rising wages (Cost of Living Allowance plus incremental pay scales) that are out of step with increases in productivity. This is what has made Cyprus so expensive. Businesses which are faced with constantly increasing labour costs will keep raising their prices, knowing they will still sell their products thanks to the very big number of grossly overpaid state sector workers who can afford to buy them.
No deputy would dare mention the real cause of the soaring cost of living, which has put our tourism market in terminal decline, because he would become very unpopular. It is much easier to give people false hopes with talk about a new commissioner who would put everything right by waving a magic wand.
