Government revenue, expenditure shortfall
debt up 14%
As expected, the shortfall between government revenue and expenditure
saw an increase of Lm14.6 million, or 17.4 per cent, between January
and October this year. The shortfall for the first 10 months of this
year - deducting the contribution to the Sinking Fund for local and
foreign loans as well as direct repayment of loans stood at Lm83.5
million, while the shortfall over the same period last year had stood
at Lm68.9 million.
The national Statistics Office reports that Ordinary Revenue made up
78.9 per cent of this years budget forecast and this year increased
by Lm32.6 million, 6.6 per cent - reaching Lm525.7 million. This compares
with the Ordinary Revenue collected during this period last year made
up 81.1 per cent of the actual total ordinary revenue for the whole
It must also be noted that for the January-October 2000 period the government
had also received Lm12 million through proceeds from asset sales and
Lm6 million in the form of grants. This year the government is in receipt
of Lm0.8 million in the form of grants from the EU.
Over the first 10 months of this year, revenue from Consumption Taxes
(VAT) increased by Lm8.1 million or 9.3 per cent, and collections under
the Social Security Contributions went up by Lm9.4 million or 7.5 per
cent. In the period under review receipts from Income Tax exceeded those
for the same period last year by Lm9.6 million or 8.1 per cent. At the
same time, the Duty on Documents Item of Revenue yielded an additional
Lm2.0 million. On the other hand no increases have been reported this
year under Customs and Excise, mainly due to a time-lag payment by Enemalta
Total expenditure over the first ten months of this year amounted to
Lm616.4 million, an increase of Lm46.8 million, or 8.2 per cent, over
the Lm569.6 million that had been expended last year.
Total expenditure to date made up 80.3 per cent of the budget estimate
for this year, compared to a 79.5 per cent share of the actual final
outturn last year. The comparative figures of expenditures are listed
The major increase under Recurrent Expenditure was reported under the
Personal Emoluments category. This category increased its expenditure
by Lm20.2 million, or 14.3 per cent. This increase is the result of
improvements in the salary scales following the new civil service collective
agreement, the Lm1.50c per week cost of living adjustment, as well as
the normal incremental steps in wages and salaries, and the impact of
wages to former drivers. However, both last years expenditure
and this years outlay for the period under review represent 83
per cent, the former of last years final out turn, and the latter
of this years budgeted figure.
Operations and maintenance
The Operational and Maintenance Expenses category has this year reduced
its outlay by Lm2.5 million compared to last years outlay for
the same period (Lm35.7 million this year as against Lm38.1 million
last year). This reduction was brought about by less expenditure on
materials and supplies at the Health Division; as well as on transport
costs under certain Recurrent votes as a result of imprest drivers taking
up regular employment with Government, thereby shifting the expenditure
on their remuneration to the Personal Emoluments category.
Programmes and initiatives
A comparative increase of Lm14.9 million or 6.1 per cent was reported
under the Programmes and Initiatives category (Lm258.0 million in 2001,
Lm243.1 million in 2000). Although within this category, last year Government
paid a one-off budgetary compensation payment of Lm4.0 million, this
year excess expenditures were reported in respect of Treasury Pensions
(+Lm5.5 million), the State Grant (+Lm2.9 million), Social Security
Benefits (+Lm4.5 million), and Church Schools financing (+Lm1.9 million).
On account of this years contributions to the University of Malta
and the Junior College, the Contribution to Government Entities category
this year registered a comparative increase of Lm4.6 million, or 18.3
per cent (Lm29.7 million this year compared to Lm25.1 million last year).
Public debt servicing
The interest portion of public debt servicing costs increased by Lm3.3
million or 7.2 per cent, from Lm46.2 million during the first ten months
of 2000 to Lm49.6 million during the period under review. This increase
was mainly the result of loans borrowed during the second half of 1999
and the resort to Treasury Bills. The Contribution to Sinking Fund in
respect of local and foreign loans this year amounted to Lm6.2 million,
a marginal decrease from the Lm6.4 million contributed during the same
period last year.
Capital expenditure during the period under review increased by Lm6.4
million or 9.5 per cent, and amounted to Lm74.1 million. While Lm1.8
million more has been spent this year on road works, an additional Lm2.7
million has been incurred this year over the amount spent last year
under the Ministry for Economic Services (mainly by way of public entities
debt servicing costs). At the same time an additional capital outlay
of Lm2.8 million was reported in respect of expenditure on the New Hospital
Provisional statistics supplied by the Central Bank of Malta report
that Government Debt outstanding at the end of October stood at Lm1,021.4
million; up by Lm124.9 million, or 13.9 per cent, from Lm896.5 million
outstanding at the end of October last year.
Treasury Bills and Malta Government stock accounted for Lm194.9 million
or 19.1 per cent, and Lm791.7 million or 77.5 per cent respectively.
The remaining share of Lm34.9 million or 3.4 per cent was made up of
foreign borrowing. At the end of October, Government debt was Lm96.5
million more when compared with the end of last year. Compared to one
month earlier, Government debt was higher by Lm18.2 million.
The latest available data on the Government Guaranteed Debt shows an
amount of Lm421.4 million representing outstanding balances on the debt
guaranteed by government as at the end of September this year. This
amount excludes MIGA and IBRD positions and government guarantees on
foreign loans taken by the Central Bank on behalf of the Malta Government.
These loans already feature in the calculation of government foreign
debt. The aggregate figure of Lm421.4 million was arrived at by adding
the amount withdrawn (whether overdraft or loan), to the interest charged
during the period in question. If this figure exceeds the limit, the
latter is then reported as being the total balance guaranteed by Government.
The guaranteed debt has continued with its declining trend. In fact,
the figure of Lm421.4 million is Lm13.3 million lower than the Lm434.7
million guaranteed at the end of June, and Lm48.3 lower than the Lm469.7
million guaranteed at the end of last year.