NEWS | Wednesday, 01 August 2007

Deficit and debt statistics create confusion

The National Statistics Office of Malta released a report presenting data from the Consolidated Fund of Government as at end June 2007. This report shows that the shortfall between recurrent revenue and total expenditure for the first half of this year has amounted to Lm75.7 million.
During the first six months of the year revenue from Income Tax increased by Lm15.1 million. Parallel to this, income from Social Security Contributions and from Value Added Tax increased by Lm5.9 million and by Lm3.3 million respectively. On the other hand, revenue from Grants declined from Lm24.1 million last year to Lm2.9 million in the period under analysis. Regular outflow amounted to Lm390.8 million, an increase of Lm18.2 million compared to the same period last year. This increase was essentially brought about by a rise in Social Security Benefits, by higher outlays on medicines and surgical materials by the Ministry of Health, as well as by increases, due to Government’s energy support measures, under the Ministry for the Family and Social Solidarity.
Lower interest payments on Government’s long-term borrowing resulted in a decline in the interest component of the public debt servicing costs for the January-June period. The total interest payments for the six months under review amounted to Lm38.4 million.
Capital Expenditure for the first six months of the year amounted to Lm46.8 million, registering a decline of Lm5.2 million when compared to the capital expenditure of Lm52.0 million for the same period in 2006. Lower capital outlays by the Ministry of Finance and by the Ministry for Tourism and Culture were in part offset by higher expenditures under the Ministry for Rural Affairs and the Environment.
New loans taken up by Government for the first six months of the year amounted to Lm28.9 million.
The Central Government debt outstanding at the end of June 2007 amounted to Lm1, 380.5 million. When compared to twelve months ago, Government Stocks and foreign borrowing declined by Lm42.4 million and Lm10.1 million respectively, while outstanding Treasury Bills increased by Lm75.2 million.
When asked to comment on this report, Edward Fenech, the spokesperson on Financial and Economic Affairs of Alternattiva Demokratika, stated, “The NSO never seizes to amaze. They have just published statistics for Government Finance Data for the first six months of this year. These indicate that ‘Grants’ received have fallen, as compared to the first six months of 2006, by Lm 21 million, from Lm 24 million to Lm 3 million, without providing any explanation as to this occurrence.
“Furthermore, the statistics show that revenue from ‘Income Tax’ has increased by 18.5% (some Lm 15 million) without providing any further explanation for this. This is highly unprofessional and once again reduces public confidence in this institution. Before these very material changes are explained, nobody can reasonably comment on these statistics. The NSO should provide the requisite explanations immediately.”