25 July 2001


Search all issues

powered by FreeFind


Send Your Feedback!





Half-year government finance
- Lm54.5m revenue-expenditure shortfall, both on the rise

The National Statistics Office reports that a smaller contribution to the sinking fund, a fund accumulated to pay off public debt, in respect to local and foreign loans saw a shortfall between ordinary revenue and total expenditure during the first half of the year. The shortfall amounted to Lm54.5 million a figure considerably up from a comparable shortfall of Lm39 million registered during the same period last year.

Even though ordinary revenue increased in no small way by Lm13.7 million, 4.7 per cent, the expansion was offset by an increase of Lm29.2 million in total expenditure.

During the six-month stretch, consumption taxes as well as social security contributions increased by Lm5.7 million each. Meanwhile, yield from income tax increased by Lm3.8 million, or 5.9 per cent.

However, revenue from customs and excise declined by Lm2 million, or 7.6 per cent. Total ordinary revenue to date makes up 46.2 per cent of this year’s original budgeted revenue forecast.

Recurrent expenditure, excluding public debt servicing over the time frame amounted to Lm286.3 million, an increase of Lm19.1 million, 7.2 per cent. However, total expenditure during the first halves of 2000 and 2001 were both within the 50 per cent benchmark when comparing the current year’s data with the budgetary estimates and last year’s data with the actual final out turn.

As had been anticipated, the major increase under recurrent expenditure was reported under the personal emoluments category. In fact, this category increased its expenditure by Lm12.1 million, 14.3 per cent, and hit Lm96.8 million.

The increase was mainly due to the raising of salary scales following the new civil service collective agreement, the Lm1.50c per week cost of living adjustment and normal incremental steps in wages and salaries.

A comparative increase of Lm7.7 million or 5.4 per cent was reported under the programmes and initiative category. Although within this category, the government last year paid a one-off budgetary compensation of Lm3.9 million, while this year excess expenditures were reported in respect of treasury pensions (+Lm3.3 million), the state grant (+Lm1.8 million), social security benefits (+Lm4.9 million), and church schools financing (+Lm1.3 million).

Meanwhile, on account of the Water Services Corporation debenture interest settlement, the contributions to government entities category increased its expenditure by Lm2.4 million.

The above additions to the recurrent expenditure were in part offset by a reduction of Lm3.2 million within the operational and maintenance expenses category. This reduction was brought about by less expenditure on materials and supplies at the Health Division.

Loans borrowed during the second half of 1999 and the resort to Treasury Bills have increased the interest payments on the public debt by Lm2 million, 7.1 per cent. Meanwhile, the government this year transferred Lm6.2 million to the sinking fund, compared to just Lm0.4 million transferred last year.

Capital expenditure during the period under review increased by Lm8.2 million or 21.3 cent, and amounted to Lm46.5 million. The Malta Tourism Authority has this year utilised Lm0.9 million more than the amount withdrawn during the same period last year. At the same time additional outlays of Lm1.5 million and Lm2.2 million were respectively reported in respect of road works and acquisition of property.

Mainly due to Malta Freeport debt servicing costs, capital expenditure by the Ministry for Economic Services showed a comparative increase of Lm3.6 million.

Provisional statistics supplied by the Central Bank of Malta report that Government Debt outstanding at the end of June stood at Lm974.2 million; up by Lm93.4 million, or 10.6 per cent, from Lm880.8 million outstanding at the end of June last year. Treasury Bills and Malta Government stock accounted for Lm167.1 million or 17.2 per cent, and Lm770.0 million or 79.0 per cent respectively. The remaining share of Lm37.1 million or 3.8 per cent was made up of foreign borrowing. At the end of June, government debt was Lm49.2 million more when compared with the end of last year. Compared to one month earlier, government debt was higher by Lm11.9 million.



The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt