Friday, 25th April 2008 - 12:54CET
Deficit widens by €80m in first quarter
The shortfall between recurrent revenue and total expenditure in the first three months of the year increased by €80.4 million, and amounted to €210.1 million when compared to the same period of 2007, the NSO said today.
It said an increase of €110.2 million in total expenditure was partly offset by an increase of €29.8 million in recurrent revenue.
During the first three months this year, the Consolidated Fund recorded an increase of €14.9 million in revenues from income taxes, while revenues from fees of office and from Value Added Tax increased by €5.5 million and by €5.4 million respectively. Dividends on investment also added €7.8million during the period under review.
Recurrent expenditure amounted to €520.5 million, an increase of €70.7 million compared to the first quarter of 2007. Major increases in recurrent expenditure were recorded under the Social Security Benefits (+€28.0 million), and under the Ministry for Rural Affairs and the Environment (+€9.4 million).
The interest component of the public debt servicing costs for the first quarter this year increased by €6.3 million, and amounted to €59.5 million.
Government’s outlay on its capital programme for the first quarter this year amounted to €82.2 million, an increase of €33.3 million when compared to expenditure of €48.9 million for the same period last year. During the period under review capital expenditure under the Ministry for Investment, Industry and Information Technology, and under the Ministry for Rural Affairs and the Environment increased by €13.6 million and €10.3 million respectively.
No new loans were taken up during the first quarter.
The Central Government debt outstanding at the end of March amounted to €3,298.2 million, an increase of €93.7 million compared to the gross Central Government debt outstanding at the end of March 2007.
While long-term borrowing increased by €136.4 million, short-term borrowing and foreign borrowing declined by €59.3 million and €6.6 million respectively. At the end of March, the stock of euro coins added to the gross government debt position amounted to €23.3 million.
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An increase of €80 million in deficit for a three-month period is incredible !! It means that if from €120million it shot up to €210m, then there was a 50% increase !!!! And this for the first three months only !! One starts to wonder whether payments were held back to be in the Euro-acceptance parameters in the past, or whether this deficit is due to an increase in activity, projects, back-payments, etc caused by the election-rush and to induce an feel-good factor.
In a one-year period the total deficit increased by €93.7 ... and this when were told that ad nauseum that the Government has now the finances under control !!!!
Does this mean that now we will be told some kind of excuse to justify why this situation was hidden to the people before the 8th March ? Its impossible that the Prime Minister didn`t have a clue of what was happening .... so he was either giving a distorted picture, or else he was honest but without control and responsibility.
Now.... what is the next step ? Will we be told that unfortunately "iz-zmien li issa niehdu il-frott" has to be postponed and that we will see another increase in taxes to make up for this ? (If the economy slows down ,there will be less income from taxes so unless the government controls the expenditure, the only way to counter the deficit is to increase the VAT rates). If we are in this financial position well before the promised tax-bands revision took place, what will happen then ? Will Mr. Dalli now tell us that unfortunately the free health sector is not sustainable anymore ?
Barely seven weeks have passed since we last heard all the sweet talk ! Now it seems that we were either living a dream, or else we were taken for a ride by being told a fairy tale !!
Great start GONZIPN!