Government determined to strengthen finances but not at cost of social needs

The government is determined to continue strengthening the country's finances to reach a surplus by 2010 but it would not do this to the detriment of social needs, the Finance Ministry said in a statement.

Given that the world is facing increased prices in oil and essential food sources, the government had no difficulty revising its estimates to ensure that no one lags behind.

The ministry was reacting to comments by opposition leader Charles Mangion who demanded an explanation on how much the government was forking out on the electricity bills subsidy.

Replying to these comments "in the interest of the citizen", Mr Fenech explained that on drafting the budget for 2008, last October, no one could have foreseen the precise electricity subsidies required at a time when the electricity surcharge was fixed at 50 per cent.

The price of oil kept rising, as did the difference on the subsidies. When the government presented the budget, it allocated €20.5 million in subsidies and gave Enemalta a further €37 million to alleviate the burden.

July's increase in the surcharge (to 95 per cent) was inevitable due to the steep rise in the oil price, yet the government felt it could not burden the population by increasing the surcharge to 115 per cent - which reflected the estimated oil increase by September, the ministry said.

Therefore, this additional 20 per cent subsidy (115 less 95 per cent), amounting to €6 million, was added to government expenditure for this year.

The different figures quoted by Dr Mangion (who demanded an explanation for the differences) simply referred to different periods that were: €30 million in subsidies from January to June 2008, €37 million from October 2007 to June 2008, and €43 million from January to September 2008.