Same statistics, different interpretation: Government, Opposition have their say

NSO statistics confirm the consistent progress being made with regards to Malta’s public finances, the government said.

Yet, the Opposition says the opposite: statistics released by the National Office of Statistics today confirm that the gross general government’s debt shot up by €549 million in the first two years of this legislature.

"This means that in each and every day spent in office, this government spent €600,000 more than it earned. Government’s debt is expected to continue expanding during 2015 and 2016," the PN said.

"Part of this debt is due to the rapid explosion in the public sector wage bill.  Between 2012 and 2015, the public service wage bill shot up by €132 million. Government is budgeting a further increase of €50 million for public service wages in 2016 bringing the total public service wage bill to €790 million from €612 million at the end of 2012."

The PN said that the increase in the wage bill was fuelled by the thousands of jobs created in the public sector, the high wages being paid on consultancies and the jobs created for those in the inner circle of friends. All this contributed to the debt as did the monies spent on dubious deals including the €4.2 million paid out on the Café Premier deal. 

"The debt could have been higher were it not for the fact that government sold the BWSC plant to Shanghai Electric and used the proceeds to pay off Enemalta’s arrears on excise tax. The most worrying aspect in all this is that government has nothing to show for this debt. This government did not start, let alone finish any of its promised capital projects."

Government's explanation

The first release confirmed that the Government achieved its deficit target for 2014, 2.1%, and also that national debt fell to 68.3% of GDP, from 69.6% a year earlier.

The second release showed that during the second quarter of 2015, growth-friendly fiscal consolidation continued to progress. The Quarterly Accounts for the General Government show the deficit during April – June 2015 standing at €47 million, significantly lower than in the corresponding period in 2014 (€72 million).

"This improvement was driven by a very healthy increase in revenue from income taxes, which rose by €40 million despite a further reduction in tax rates. This positive result reflects the positive impact of higher economic activity on government revenue. On the other hand, increased efforts to improve public health and education services underpins the rise in government expenditure. During the second quarter of 2015, there was also a very significant rise in capital investment, which at €83 million was 26% higher than in the corresponding period of 2014."

Figures also show that the debt in June 2015 represents a decline of €100 million over the same quarter of 2014. This points towards a corresponding fall in the debt ratio, although this needs to be confirmed in a forthcoming Eurostat release.

“The official reports on the progress of our public finances are confirming that while the fiscal consolidation is still on track, this is not being accomplished at the cost of economic growth," finance minister Edward Scicluna said