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Government expenditure up by 7.5% in 2012
Last year, the total government expenditure reached €3,078.0 million, up by 7.5% over 2011.
28 March 2013, 12:00am
Staff Reporter
Staff Reporter
2 min read
In 2012, the shortfall between recurrent revenue and total expenditure increased by €143.7 million when compared to 2011, and amounted to €362.3 million.
The National Statistics Office (NSO) said that an increase of €71.9 million in recurrent revenue was exceeded by higher total expenditure of €215.6 million.
In 2012, recurrent revenue stood at €2,715.7 million. The comparative increase of 2.7% was due to higher returns from Income Tax (+€89.8 million), Social Security (+€24.1 million) and Miscellaneous Receipts (+€34.3 million).
Conversely, lower proceeds were registered from Customs and Excise Duties (-€52.4 million) and Grants (-€28.3 million).
Last year, the total expenditure amounted to €3,078.0 million, up by 7.5% over 2011, as a result of higher outlays on all expenditure components.
Recurrent expenditure went up by €127.1 million to €2,488.4 million. The main contributors to this increase were programmes and initiatives, with added spending of €93.1 million, of which €54.6 million was recorded in social security benefits.
Other major increases in this category were registered in medicines and surgical materials (+€8.4 million), social security state contributions (+€7.8 million), which also feature as revenue, street lighting (+€5.0 million), and pensions, allowances and gratuities (+€3.5 million).
Concurrently, personal emoluments went up by €26.7 million, whereas operational and maintenance expenditure and contributions to government entities increased by €6.1 million and €1.3 million respectively.
Capital expenditure was recorded at €363.8 million compared to €288.7 million in 2011. The comparative increase of €75.1 million includes an equity injection of €20.0 million to the national air carrier.
Higher outlays on capital projects were recorded in roads infrastructure (+€10.0 million), integrated flood relief (+€9.8 million), investment incentives (+€5.6 million), acquisition of property for public purposes (+€5.3 million) and an additional €4.7 million transferred to the Treasury Clearance Fund.
The interest component of the public debt servicing costs for 2012 rose by €13.3 million to €225.8 million.
Debt increases by 3.7%
As of December 2012, government debt stood at €4,649.2 million, a rise of €164.6 million, or 3.7%, compared to 2011.
The increase in government debt was the result of higher long-term borrowing, which added €297.5 million. On the other hand, short-term securities and foreign borrowing declined by €103.8 million and €12.6 million respectively.
The euro coins issued in the name of the Maltese Treasury rose by €4.3 million when compared to the coin stock as at the end of 2011, and totalled €50.1 million.
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The main task which the Minister of Finance should focus on is reducing the cost of operating Government. There is significant waste within Government especially in the Authorities and these costs should be reigned in with urgency. The second component of the equation is to continue to increase economic activity by providing the tools necessary to the entrepreneurial class to continue investing, creating opportunities and wealth. These are two holy grails if economic momentum is to be maintained. Over the first term the electorate will expect a combination of GDP growth and national debt reduction , these two can only happen if Government gets its house in order whilst getting investments flowing. It's a mammoth task but it's doable. An important source of revenue is foreign direct investment through the acquisition of properties. Government has to address the significant mistakes made by the previous administration in this respect and get investment flowing in quickly especially with the current vacuum that exists in Cyprus.
