Gonzi urges chairmen to stick to financial targets

Government-appointed chairmen of corporations and agencies were warned yesterday that they must not exceed the financial targets established in the budget.

With the structural deficit and Lm1 billion plus national debt very much in mind, Prime Minister Lawrence Gonzi met the chairmen and chief executives of government "extra-budgetary units" and stressed the need for accountability.

He told the media after the meeting:

"They have to make sure that money allocated to them is spent in an accountable manner." The meeting, he pointed out, was not for chairmen of all government quangos but only for those units that depended entirely on the government for funding as they did not generate their own revenue.

Expressing dissatisfaction that a number of government entities were not doing their utmost to control expenditure, the Prime Minister said the government was setting up a unit which, operating within the Finance Ministry, would monitor how money was being spent and would guarantee that money was managed in "the best way possible".

It was obvious that by making the matter public, Dr Gonzi was hoping to bring the pressure of public opinion to bear on defaulting bodies.

Asked to give examples of how the government could cut costs, Dr Gonzi said a long list of examples of ongoing and planned projects could be mentioned. He said the Mater Dei Hospital was a major issue.

The project, described by many as a white elephant, has cost millions of liri to build, and is expected to sharply exacerbate the government's current expenditure in the health sector when it starts operating.

The government would be clamping down heavily on those who evaded VAT, the Prime Minister said and, with the faltering tourism industry in mind, he also went on to refer to tourist operators who were overcharging tourists and giving a "bad name" to the country.

He said a major blow to the government's bid to curb extra costs was the soaring price of oil.

A report in yesterday's issue of The Times indicated that government-owned companies Air Malta and Enemalta would spend an extra Lm4.4 million between them by the end of the year if oil prices remained as they are, that is around $45-46 a barrel. Yesterday oil prices rose to a high of just below $48 per barrel.

Dr Gonzi also indicated that, as a result of the soaring price of oil, the recent cost-cutting exercise at Air Malta would take longer to bear fruit.

Asked if the government planned to reverse the purchase of the Lm6.5 million building for Malta's permanent representation in Brussels, Dr Gonzi once again defended the decision, saying the building was an investment that would generate revenue in the short term.

"The decision will not be reversed. Malta needs the building to reap the benefits of membership," the Prime Minister said.

He reiterated his belief that the Brussels building was an asset for the country.

Dr Gonzi also said that civil servants who remained in employment as consultants after they reached the pensionable age were kept so as to remain "active in the economy".

This privilege, however, was only limited to a handful of people from scale five upwards and whose "knowledge and experience,", accumulated through the years, made them not "easily replaceable", Dr Gonzi said when asked if the government intended to keep senior civil servants in employment after they retired.

However, the Prime Minister said, each case should be treated on its own merits.