Prime Minister has no moral authority on spending cuts - Labour

The Prime Minister is asking the heads of the civil service to recommend cuts in budgetary spending to reduce €40 million of this year's projected government expenditure, Labour MP Helena Dalli said today.

The cuts are part of an agreement with the European Commission to intensify Malta's deficit-reduction programme.

Dalli said Lawrence Gonzi had asked civil servants to cut down on their budgets, when the 2012 Budget last October had been "too optimistic an exercise" to keep Malta's debt and deficit-reduction programme on track.

"The prime minister does not have the moral authority to ask his civil servant heads to cut down spending, because he is not leading by example.

"Many of the heads of public authorities are people he himself appointed, whether on the strength of their abilities or their partisan preference. Now, after reaping the popularity of his budgetary measures, he is going back to the civil service and telling them to cut back their programmes and initiatives," Dalli said.

The Labour MP was lacking in practical examples of how a Labour government would go about cutting €40 million in spending.

But she said the government had given a carte blanche to public authorities and corporations to rent out private office space at great expense. She listed as an example the €3.87 million refurbishment of the former Institute of Healthcare for the temporary relocation of Malta Enterprise, the government's investment arm.

"Government is always giving these authorities a free hand to spend millions," Dalli said. "Now it's a bit late in the day for the Prime Minister to put the onus of spending cuts on these people."

Dalli also complained that government was not being honest in indicating exactly where cuts in budgetary spending will be taking place.

"If government is not honest and does not show its cards, how can we suggest practical examples? It will be a different picture once we are in government. One of our proposals would certainly be not to give ministers a salary increase, especially when we are in this financial situation."

Prime Minister Lawrence Gonzi announced his ministers would be forfeiting their parliamentary honoraria as part of the €40 million in budgetary cuts on 6 January, when announcing a cabinet reshuffle.

The 0.59% cut in government spending, after  European Commissioner Olli Rehn informed the Maltese government on 11 November - three days before the last Budget - that Malta will have to meet its target for a deficit that is lower than 3% of gross domestic product.

The finance ministry said the budgetary cuts will comprise of reducing €6.85 million in new recruitment; €2.75 million in overtime; €4.68 million in operations and maintenance; and a massive €14 million in programmes and initiatives and €11.4 million taken away from public sector entities.

Labour MEP Edward Scicluna has said government will have to wipe off as many as 500 jobs in a recruitment freeze to save millions in spending on the European Commission's orders: "The first lever the government suggested is a sort of freeze on recruitment and on overtime. I reckon some 400 to 500 jobs need to be wiped off the government sector and the suppression of 400,000 hours or so."