The political battle between the Balearics and Madrid escalated yesterday with Palma announcing that it has no intention of introducing the new fuel tax. Balearic government spokesperson, Antoni Garcías, said that although Madrid expects to see the fuel tax introduced in all autonomous regions at the start of next year, the Balearic government intends to stand firm and refuses to introduce the tax during this current legislature at least. Palma considers the four pesetas per litre tax as being unfair and contradictory. Garcias said that all Socialist controlled autonomous regions in Spain are refusing to enforce the tax. Madrid has decided to introduce the new tax in a bid to raise extra funding for the health service in autonomous regions and will therefore in the long run prove beneficial. Garcias said that the Balearic government does not understand how Madrid can, on the one hand, take the Balearics to court over the tourist tax while on the other introduce a new fuel tax. Garcias said that while the tourist tax will benefit the region, the fuel tax has nothing beneficial to offer the islands. The cost of fuel in the Balearics has always been a highly sensitive issue. Two years ago the Balearic government was prepared to set up a local fuel distribution consortium to compete with the multi-nationals in a bid to ensure that the costs of fuel remained as low as possible. According to Garcias, Madrid has indicated that the extra money raised by the fuel tax, if not used to fund the local health service, could be spent on the environment. It does not make sense, if that is the case, then why does not Madrid drop its legal case against the Balearic tourist tax, he said. We do not intend to introduce the fuel tax before the next elections in 2003, when all the local political parties will be able to express their own opinions, he added. In the meantime however, the Balearics intends to push ahead with talks with Madrid over control of the regional health service being handed over to Palma. Garcias said that it appears central government has miscalculated its national health budget and needs to find extra funding, but with the autonomous regions being asked to pay. Since 1996, fiscal pressure on the autonomous regions has risen by three per cent, Garcias said. But Madrid is not compensating us in return.