Updated: Country's financial situation deteriorating - Mangion
(Adds Finance Ministry's reply)
The country’s financial situation has deteriorated despite an increase in government revenue from taxation, the Opposition spokesman for finance, Charles Mangion said.
In a statement, Dr Mangion said that the most recent statistics showed that between January and October the government increased its debt by more than €159 million over the same period last year.
This was in spite of raising the water and electricity surcharge to 95 percent and reducing capital expenditure.
Dr Mangion said that compared to the first 10 months of 2007, the deficit widened by more than €77.4 million to reach €243 million, four times more than what had been forecast by the government.
This figure did not include the €55 million the government would be allocating to shipyard employees. This led to serious doubts on whether the government would keep within the revised projection for this year’s deficit of €200 million.
The government, Dr Mangion said, borrowed more than €285 million in the first 10 months, an increase of nearly €160 million over the same period in 2007.
This phenomenal increase was reflected in a six percent increase in debt servicing costs which for the first 10 months of the year reached the sum of €167 million.
The country’s debt, which had accumulated under Nationalist governments, meant that the debt burden on each Maltese and Gozitan family was to be of more than €25,000.
In a reply to this statement, the Finance Ministry said this evening that the government was committed to reach its financial aims because these were important to attract foreign and local investment creating more employment and wealth.
However, the government could not ignore the international situation so it decided to postpone its aims by a year to invest in a wide infrastructual programme, environmental projects, education and training as well as in measures such as the reduction in income tax aimed to leave more money in the people’s pockets.
Dr Mangion’s statement clearly showed the opposition’s lack of vision because while the opposition was going through with an intense campaign against the revision of water and electricity rates, requesting the government to spend more to subsidise the utilities, and for the government to further reduce taxes, increasing deficit in the meantime, the opposition’s spokesman was criticising the deficit.
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Paul Smith
Dec 5th 2008, 18:14
I think that the global financial system as we know it is broken completely and simply un-fixable in it's current form. You cannot have exponential growth on a planet of finite resources and therefore you cannot have exponential growth of the money supply. Since all new money is created as a debt in the form of loans, there has to be a means to pay back that loan + interest which means more and more money has to be issued as debt. All the printed money in the world was created as debt, so all the interest that needs to be paid as well as the principal has to be created as debt. This causes us to use precious resources we should be saving for our kids futures now and quickly. GDP needs to be thought of as energy usage and resource usage which is turned into goods and services via the materials economy.
Therefore it is simply impossible for this system to continue. Our leaders know this, they just cant think of any other way than business as usual, as we speak, this system is on life support and wont survive the operation.
Sinclair Calleja
Dec 5th 2008, 15:32
@ J Baldacchino
If this country were to be run like an enterprise (or indeed any non-profit organisation), then the population, being the shareholders, will have the right to see the accrual-based financial statements for the past years. Based on the performance of its directors (the MPs in case of government), the population would vote whether to reinstate the directors or not.
Unfortunately, our government does not work like this (and I presume only a small percentage of the population would care to bother with figures anyway). While the voting does take place, there are no financial statements on which to base your vote. So, while we do own the hairdressing salon, our ownership rights are just a nice concept we like to write about and believe we have.
J Baldacchino
Dec 5th 2008, 13:45
@ Sinclair Calleja
Unless you are the hairdresser own hairdresser ... think about it. :-)
Adrian Gouder
Dec 5th 2008, 13:28
Is it possible that Labour can't use just a little less rhetoric? Does Labour realise that we hear this all the time. Everyone surely knows that the PN do their worst for first, and save the best for last. Aren't we used to it yet? (I think Dr. Alfred Sant tried this too... but didn't get to the 'last').
I must admit it is a cycle I am aware of and used to... because it is so predictable. Yes, Dr. Mangion, we are all wallowing in misery, swimming in disaster, helplessly on a collision course with hell on earth... But then by some miracle, in a couple of years or so, things will get so much better, taxes will be lower, things will suddenly look great and PN will miraculously win the election by a fraction once again.
Get your act together please m the country needs you, but only if you're serious about what you are doing.
Sinclair Calleja
Dec 5th 2008, 13:04
@ J Baldacchino
One doesn't ask a hairdresser whether he needs a haircut... think about it.
J Baldacchino
Dec 5th 2008, 12:08
Hi, Dr Mangion, you must be kidding?? Whom shall we believe - Par Idejn Sodi, Finanzi fis-Sod, Money NO Problem??