Public finances in "total
chaos" Charles Mangion
MLP Deputy Leader Charles Mangion yesterday branded Maltas
public finances "a total chaos", saying the countrys
public debt had risen to Lm1,230 million after July registered an increase
of Lm43 million in debt. The level of public debt as a percentage of
GDP had reached a staggering 70 per cent. As public debt soars mightily
over the billion mark, Mangion appealed to government not to consider
introducing new taxes as it had promised in the last budget.
"Government is facing a reality it was previously hiding",
Mangion said, where the economic slowdown Finance Minister John Dalli
had announced was seriously contrasting with one of the PNs electoral
chants that the countrys finances were "on solid ground"
In these first six months of the year, Government revenue increase by
0.1 per cent Mangion said, "a sure sign that there has been no
"The fact that government revenue will be Lm25 million less than
what was predicted, shows governments aims in its 2003 budgetary
estimates have failed," Mangion said.
Mangion said recurrent expenditure had increased by nine per cent (Lm30
million), showing "lack of competence". He asked where so
much of this recurrent expenditure was being channelled to as wages
and salaries had remained the same whilst social benefits had increased
by Lm9.1 million. Substantial increases were registered in public sector
operations (Lm5.6 million), public sector contributions (Lm5.6 million)
and the public-private partnership (Lm2 million).
Mangion asked whether any form of cost-benefit analysis had been performed
in the new public sector initiatives for the creation of new authorities,
and whether the states restructuring programme was living up to
"This means the deficit has increased to Lm113.7 million when this
had to be Lm75 million. This means a deficit of 7.7 per cent of GDP,
miles away from governments 3 per cent target according to the
Consolidated Account Structure estimates."
Government had failed to ensure economic growth, fiscal efficiency and
to reduce recurrent expenditure, Mangion said, pondering whether government
would be suggesting any alternatives or if it had fallen out of ideas
as it faces this economic reality.
Mangion said the MLP the believed a monitoring team within the Ministry
of Finances to plan expenditure and revenues for the next five years
within public entities and government departments, and to ensure a deficit-reduction
target of 1 per cent every year. Mangion also said there was great need
to reduce bureaucracy and commence benchmarking exercises in the public
"When one considers the state of our public finances," Mangion
said, "it is clear that the PNs electoral promises were just
a gimmick, as is the promise that economic growth would increase by
three to four per cent.
"An economy does not work on gimmicks but through commitment and
serious measures for the control of public expenditure, accountability
and cost-benefit analyses of government activity. The many promises
of a new spring today have exploded into nothing because government
had proved itself to be incompetent and directionless."