The spending cuts just announced by the government will mean a cut of almost €10 million in civil service wages and overtime payments, according to the Labour Party.
We are expecting another budgetary revision in March because the figures for last year also went haywire
Labour finance spokesman Karmenu Vella yesterday presented a breakdown of the spending cuts in euros rather than as a percentage of GDP. The government has so far spoken in term of percentages.
He said the cutbacks included about €14 million in programmes and initiatives that covered social benefits and pensions, almost €12 million for government entities and almost €5 million in maintenance costs.
Mr Vella, who was flanked by the party’s economy spokesman Charles Mangion and MEP Edward Scicluna, urged the government to come clean and give a detailed breakdown of the spending cuts.
The Finance Ministry later insisted that social benefits and pensions would not be touched.
It said the cuts were intended to reduce operational and administrative expenses. This would increase efficiency and benefit the economy, it said.
The ministry did not give a breakdown in euros of the cuts, nor did it say which programmes or entities would be affected negatively.
The government last week announced fresh budgetary measures to cut recurrent expenditure by almost 0.6 per cent of GDP, which according to the PL is equivalent to about €40 million.
The cuts were not included in the Budget 2012 announced just two months ago. The government was forced to review its expenditure after the European Commission raised question marks over deficit projections.
The Commission said on Wednesday it was satisfied with the corrective measures and revised Malta’s deficit projections for 2012 down to 2.6 per cent.
However, the Commission’s projection is higher than the 2.3 per cent deficit target set by the government in the Budget.
The Commission only delivered its opinion on Budget 2012, Mr Vella said, and in March was expected to review the official figures for 2011.
“We are expecting another budgetary revision in March because the figures for last year also went haywire despite the government’s accounting,” he said.
Dr Mangion noted that the government’s commitment with the Commission to cut the civil service wage bill jarred with a previous decision to absorb about 200 redundant Air Malta workers.
Prof. Scicluna said the cuts announced last week amounted to an austerity programme that could have been avoided had the government heeded the Commission’s warning last year and adopted aprudent Budget.
“This is certainly not a certificate from the Commission but simply a recognition that the government, which was in a straitjacket, acted as expected,” Prof. Scicluna said.
ksansone@timesofmalta.com