Government reviews budgetary allocations

The finance ministry today announced a partial review of budgetary allocations, on the same day that Labour leader Joseph Muscat hinted at a pending European Commission evaluation of government's budgetary projections.

Citing "continuing economic and financial troubles" in major world economies that were fuelling instability, the finance minister said the review was intended to safeguard investment and job creation.

The review will involve all ministries, departments as well as government entities, and targets reductions in the approved 2012 recurrent budgetary allocations which shall, on aggregate, amount to a total 0.59% of the GDP.

The expected outcome is to result through savings emanating from restraints in recruitment (0.1% of GDP), overtime (0.04% of GDP), operational and maintenance expenditure (0.07% of GDP), programmes and initiatives (0.21% of GDP) and government entities (0.17% of GDP).

Prime Minister Lawrence Gonzi today announced ministers will lead by example and take a major cut in their salary by giving up the €26,000 parliamentary honoraria in 2012 and 2013.

All approved capital budgetary allocations shall remain unchanged.

"Unfortunately, despite efforts being taken at European level and by individual European Member States, this turbulence is showing no signs of subsiding," finance minister Tonio Fenech said.

"As announced by the Prime Minister in his statement today, in order to be better placed to counteract any impact which may arise as a result of increasing risks in the international economic situation as well as developments within the public finance sector, it has become necessary to undertake a partial review of the 2012 public sector budgetary allocations approved in the recent 2012 budget."