The government’s wage bill rose by €18 million in the first seven months of the year, reflecting higher payments to public service employees negotiated in the 2005 collective agreement.

The higher wage bill was one of the major contributors to the increase in government expenditure, according to figures released by the National Statistics Office.

However, an increase of €59.3 million in government expenditure was made up for by higher tax receipts, which contributed to a lower deficit than that for the same period last year. The deficit in July stood at €322 million, a drop of €46.5 million over last year’s.

According to the general secretary of the Union Ħaddiema Magħqudin, Gejtu Vella, the collective agreement, which covered the six-year period between 2005 and 2010, had reserved substantial increases for the final year.

“Malta was in the process of changing over to the euro in 2008 and, not to cause any shocks to the system, the agreement was to shift the higher increases towards the end of the period,” Mr Vella explained.

Apart from wage increases, the other substantial expenditure hike was in outlays on social security benefits of €24 million.

Total expenditure for the first seven months stood at €1.6 billion.

On the other hand, revenue topped €1.2 billion, with the government seeing higher receipts in income tax (+€25.5 million), grants (+€23.4 million), Customs and excise taxes (+€23.2 million) and social security contributions (+€10.9 million).