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The expenditure on the CHOGM events may have left government a little more poorer but there is no doubt that it did have a positive multiplier effect on the economy.
Government last week published a statement of the income and expenditure for the organisation of CHOGM 2005, audited by Grant Thornton.
The sponsorship income which the Task Force entrusted with the organisation of CHOGM succeeded in registering was Lm366,000, whilst the total expenditure was Lm2,559,000 bringing the net expenditure to just under Lm2.2million. In an explanatory note by the chairman of the task force, it is stated that the expenditure of Lm2.56million includes the sponsorship amount of Lm366,000 of which 80% was in kind and 20% was received in cash.
The net expenditure was less by around Lm200,000 than that budgeted for by the Government. Moreover, included in the total expenditure figure is Lm280,000 paid for in VAT which ends up in government’s coffers anyway and around Lm15,000 paid as PAYE by individuals that worked for the CHOGM organisation.
The total expense also includes Lm235,000 in purchased equipment by government entities particularly the police and AFM, which will continue to be used. From the total value of expenditure, around Lm322,000 was paid for services to government or parastatal entities. There is no indication if this cost includes the value of sponsorships such organisations gave.
Sufficient details are given of the entities that contributed sponsorship, as well of the expenditure headings. Those entities that gave a sponsorship must have earned from the expenditure undertaken around this activity as well as for the exposure they got from coverage aimed at locals and overseas visitors.
The highest expense heading was for the Media Centre. This was expected, as it had to be set-up purposely for the requirements of journalists that attended to cover the activity.
Government also paid for hotel accommodation. One must expect the private sector also earned other revenue for accommodation of the entourage members of the official delegations. Excluding the money earned by parastatal entities, the Lm1.6 million was for services, goods and equipment obtained from the private sector. Government expenditure must have generated a positive multiplier effect within the Maltese economy.
Moreover, one must recall that the Maltese economy also earned from participants of the conferences organised just before the CHOGM event such as the Commonwealth Business Council’s Forum Meeting, meetings of Ministers, and other Commonwealth Organisations. These events would not have come about if CHOGM was not held in Malta. So for the Lm1.9 million spent by the Government from taxpayers’ money, one could conclude that as an economy, Malta earned from foreigners that visited the island in November 2005.
CHOGM was not just an activity intended to place Malta on the map but also a secondary exercise to generate economic activity. |
