Labour spokesman accuses government of overspending

The deficit increased by 117 per cent to €136.million in January, more than what the government spent in the first three months of last year, the Labour Party said.

Finance spokesman Charles Mangion accused the government of overspending and pushing the deficit up by €74 million in January.

The deficit was the result of the government's current expenditure, which rose by 25 per cent in January, much higher than the country's economic growth, he pointed out.

In the budget, the government had attributed the increase of the deficit in 2008 to the €55 million invested in the dockyard's early retirement schemes.

However, it has been revealed that €17.5 million of the scheme were not paid last year but were instead included this year, he said.

In November, Finance Ministry Tonio Fenech had said current expenditure in 2009 would drop by €18 million. Yet, an increase of €45.5 million in January was noted, Dr Mangion said.

The Finance Ministry said in reply that generating new jobs and economic stability was the government's highest priority. It used, and would keep on using, all the resources available to safeguard jobs while attracting investment to generate new ones.

Dr Mangion's statement gave the impression there was no international financial crisis, the ministry said.

The increase in deficit was noted in a recent report by the European Commission, which concluded it was temporary, the ministry said.