Plans to increase petrol tax come under fire

The increase is part of a wider plan to improve the government's financial situation and reduce its debt, a plan which was approved in Madrid by the Fiscal and Financial Policy Council, headed by central finance minister Pedro Solbes.

Details of the plan were revealed by Balearic finance minister Luis Ramis de Ayreflor, when he returned to Palma from Madrid late on Tuesday night.
He said that the increase in the petrol tax, to help fund the health service, had been “imposed” by central government. He added that Solbes said that any plan to clear the debt, of 385 million euros, could not be based on “possible future acts”, referring to the possibility of more funds from Madrid. Ramis said that Madrid had also imposed the petrol tax increase in the regions of Galicia, Catalonia and Valencia, and he had been told that “the Balearic Islands cannot be an exception.” Despite this, Ramis said that the increase, which would bring in an additional 21 million euros next year, 23 million in 2007 and 25 million in 2008, would only be introduced if negotiations on more State funding fall through over the next few months.

BAD MANAGEMENT
But Francina Armengol, parliamentary spokeswoman for the socialists, said that “bad management” by the Balearic government, not the lack of State finance, was the reason for the increase.

She also claimed that the debt is higher than reported by the Partido Popular, as the 2005 budget includes 150 million euros under the roads agreement, which has now been blocked by central government.

She also accused the government of “wasting taxpayers' money on superfluous projects” citing the cycling team, the purchase of the Costa Nord cultural centre from Michael Douglas and the site of the new hospital in Son Espases.

Maria Antonia Munar, president of the Council of Majorca, also slammed the increase, pointing out that the chief electoral message of the Partido Popular during the last elections was “fewer taxes, more safety.” She said “at the moment, there is not more safety but there are more taxes.” Munar, leader of the Majorcan Union (UM), also said that if you make electoral promises, you should try to keep them if elected.
Pere Sampol, spokesman of the Majorcan Socialist Party (PSM) admitted that the deficit in health service funding was a heavy burden on local finances, but stressed that the solution should not be to impose more taxes on people but to collect and administer the taxes more efficiently.

The two major trade unions, UGT and CCOO, also slammed the increase, describing it as “surprising and lacking in solidarity,” and saying it would lead to a rise in inflation and reduce competitivity.