Parliament approve €100m to control on rising inflation

The Parliament on Thursday approved the state’s first supplementary budget for fiscal year 2022, amid criticism that the government keeps wasting taxpayer money on mass rapid tests for COVID while skimping on aid to farmers hit hard by soaring animal feed and fertilizer costs.

The budget bill, passed by unanimous vote, provides for an extra €102 million in expenditures – relating to the management of the coronavirus pandemic and the economic fallout from the war in Ukraine.

Of the money, €53 million concerns the purchase of coronavirus test kits, paying for the mobile testing labs, accommodation for people testing positive, the genomic sequencing of confirmed positive samples, purchase of medicines and vaccines, overtime pay to doctors and nurses, and Covid-related research.

Some €700,000 is allocated for Covid documentation checks at the airports and the management of passengers on disembarking.

Schools will receive €520,000 for disinfection, the use of classrooms for antigen rapid tests, and other operating costs.

And €570,000 is allocated to the buying of services regarding the provision of coronavirus-information to the public, support at the vaccination portal, and the provision of information about the Cyprus Flight Pass.

Other than the Covid-related expenditures, €890,000 is provided to cheesemakers as compensation for loss of revenue/declining sales due to the Covid restrictions affecting the consumption of dairy products.

The purchase and storage of strategic reserves of grains – to counteract the effects from the Ukraine war – cost €18 million.

Support to goat, cattle and pig farmers amounted to €7.6 million. And €5 million went to providing support and hospitality to refugees from Ukraine.

Another €5.78 million went to airlines as part of a scheme incentivising air connectivity for the period July to December 2021.

An amendment to the bill tabled by Diko MP Chrysis Pantelides, and approved by the House, will ‘lock’ €10 million of the €102 million. The amount will be released once MPs are satisfied that expenditures during the second quarter of the year, on accommodation for Covid patients, was justified.

In remarks on the House floor, Pantelides said Cyprus is likely the only country in the EU that has continued for so long to carry out mass Covid testing as well as other related measures at the airports.

Now that the epidemiological situation is deemed satisfactory, he noted, more emphasis should go to vaccines and less to mass testing.

The Dipa party’s Alekos Tryfonides welcomed the aid given to farmers, but questioned whether it was sufficient. The amount allocated in the supplementary budget probably represents one week’s worth of assistance, he noted.

In other business on Thursday, parliament passed a government bill extending for another three months reduced VAT on motor and heating fuel.

The reduced VAT rates on motor and heating fuel – by 8.4 cents a liter and 5.2 cents a liter, respectively – expired on June 1. Under the extension now, they will continue applying until the end of August.

The bill was fast-tracked through the House finance committee, which held a special session on the matter earlier in the day. At the committee, opposition lawmakers again called on the government to submit data on the state’s revenues from fuel taxes, positing that despite the lower tax rates the state must be earning more because of the sheer increase in the pre-tax price of fuel.

Akel MP Giorgos Loukaides asserted that consumers won’t benefit despite the tax cuts, as fuel prices continue rising, already having reached record highs.

A legislative proposal has been tabled at the House energy committee for a cap on fuel prices.

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