Opposition questions how government got it so wrong on finance

The opposition has called on the government to explain why it has failed to reach its financial targets, following the publication of official figures showing that the deficit in the first half of the year grew to €256 million.

Charles Mangion, Opposition Leader, Labour spokesman on finance and chairman of the Public Accounts Committee, said the figure confirmed how amateurish the government's expenditure projections had been.

He noted that recurrent expenditure for the first six months increased to more than €123 million, or by 13.5 per cent, much higher than the rate of economic growth. In the budget estimates for this year, the government had estimated that recurrent expenditure for the whole year would increase by €66.3 million.

As a result, the deficit had "exploded", increasing by €80 million over the projected figure.

Public debt was up sharply by nearly €180 million, when according to budget estimates it was due to increase by €110 million in a whole year. This meant that in the first six months, the government had exceeded its debt target by €70 million.

Dr Mangion said that an example of wrong calculations in the estimates was shown in the section "Programmes and Initiatives" where the government projected an increase of €50 million for the whole year.

But in the first six months alone, expenditure under this category increased to more than €93 million.

The same "wrong calculations" were evident where wages and salaries were concerned. The government had projected an increased expenditure of €5 million for the whole year but the estimated figure had already been three times that in the first half of the year.

What this pointed to was incompetence or a haphazard increase in employment in the public sector before the general election, he claimed.

Someone was responsible for this, Dr Mangion said, recalling that Prime Minister Lawrence Gonzi was the Finance Minister responsible for the budget estimates for this year.

Dr Mangion asked which targets the Nationalist government was aiming at now that the budget estimates were failing.

He also asked whether the fact that the government appeared to have backtracked on its promise to lower the income tax rate meant that it had deceived the people or that government finances, after all, were not as sound as they had been made out to be before the general election.