Confusion over additional Budget cuts
Labour spokesman Helena Dalli would not make a good Finance Minister. It is one thing saying that Lawrence Gonzi has no moral authority to order the additional cuts in government expenditure when he had given his Cabinet a €500-a-week rise and had never balanced a budget. But it is quite another to chide the government for warning department heads about their duty to see how they could carry out its instructions to cut spending.
And even her point about Dr Gonzi not having the moral authority to order the cuts is somewhat flawed now because the Prime Minister has already admitted that they had made a mistake in the way they handled the matter.
Does Dr Dalli mean that the government has now put itself in a straitjacket and has absolutely no moral authority to see how it could make the required savings? Of course, all the Cabinet ministers – and not just the Prime Minister – had gone about awarding themselves the rise in a most shameful manner but surely that episode should not now stand in the way of making the necessary cuts in expenditure if this is what is required for the government to bring down the deficit to a level that conforms to the EU rules.
As the Finance Minister put it so well, civil service heads are the day-to-day managers of government expenditure and the Prime Minister was simply asking for their help and cooperation in implementing the cuts. In fact, it is expected of the department heads to cooperate and a Finance Minister, or any other minister for that matter, would not be doing his duty if he fails to ensure that this is done. This is, after all, what accountability means.
Dr Dalli would have possibly made more impact had she asked the minister to clarify the situation over whether or not the additional cuts were ordered by the European Commission; or if she insisted on the government to say how successful the cost-cutting programme it launched in its 2011 Budget had been.
The situation over the additional cost-cutting exercise has now become a bit confusing for, while the Finance Minister has said that the cuts were a precautionary measure and were never requested by the European Commission, the Prime Minister has gone on record saying that the European Commission had told Malta it needed to make a better effort to consolidate its financial position.
The Prime Minister’s remark, made at the same time that the government announced that it would be cutting the public sector budget by 0.59 per cent of the gross domestic product, was generally taken to mean that the additional cuts were requested by the Commission. Which is the correct version?
The answer is required not because it makes a difference to the need of cutting unnecessary expenditure. Clearly, it does not. However, it is important to establish whether the Commission was entirely satisfied or not with the estimates as presented by the government.
If there is waste, in whatever form, in the operations of the Administration (and everyone admits that there is), it is the duty of all in the Administration to ensure that it is checked all the time, not just when the going is rough, as it is now.
Labour would be wrong, very wrong, if, in its urge to put the Administration in a bad light it works up a sentiment against the government for trying to trim expenditure. This is not the way to win votes.
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Silvio Farrugia
Feb 14th, 20:53
Can it really be true that an MP is against government's cuts in these times and after she and her lot are always saying that there is waste. I and many like me are fed up by both sides treating us like imbeciles . They are against what to everybody does not make sense. This reminds me when there was a clampdown on people working and drawing unemployment and social benefits. and the oposition was against it. Do our politicians really love the country ?
Joseph Fava
Feb 14th, 16:24
My dear editor, it's a pity and a shame that for the likes of your goodself, Dr Helena Dalli won't make a good finance minister. However, your Tonio Fenech sures does. He fails in almost all of his predictions; he will not even think of resigning when his VAT department is awash in dirty practices, he flies on a private plane to watch his beloved Arsenal, his ex Private Secretary admits corruption and taking kickbacks to annul tax penalties to his Minister's financial patrons, he gets his villa refurbished by a company whose CEO tells us that he was commissioned by third parties who wanted to reward the Finance Minister for his efforts to help them selling property, he finds himself in the Yacht Marina contract controversy, he gets downgraded regularly now by S&P, now by Fitch and now by Moody's but assures us that all is well.....and he still makes a good finance minister.
But because Dr Dalli calls a spade, a spade and slaps free-spending sprees and a Tammany-Hall style of spending the tax-payer's monies, with tongue-in-cheek, you tell us that she won't make a good finance minister. But a once anonymous village lawyer who played second fiddle in an accounting firm, does. A person who read at Nottingham University for her Ph.D. in economics and public policy is no good for the person who penned this editorial. Why don't you give the people a chance to choose between Dr Dalli and Dr Fenech. Believe me, they'll opt for her hands down.
Angus Black
Feb 14th, 14:22
If my memory serves me right, the EU had, last November, approved Malta's budget. Unfortunately, since then, a further overall deterioration in the economic outlook for 2012 required all countries to take a second look at their projected expenditures. Malta did just that and as a precautionary exercise chopped e40 million off the expenditures as budgeted for 2012.
There is a subtle difference between 'taking a precautionary measure' and being asked 'to make a better effort to consolidate Malta's financial position'.
Taking a 'precautionary measure' means 'to take certain steps just in case' - better to have such measures in place rather than finding the necessity of making unplanned cuts overnight.
'Making a better effort at consolidating the country's financial position' is a longer term aim rather than a demand for immediate cut in the already approved budget.
The government has been doing both.
Clearly it has adopted an orderly reduction of deficits and, on the longer term, aims to have a balanced budget by 2015. In economic matters, unfortunately, nothing can be engraved in stone as circumstances change almost hourly and the mere mention of a target date is simply a calculated risk since if for example Malta balances its budget in 2016 instead of 2015, will be interpreted by the Opposition as a failure, but in reality it would be a feat.
Statements made by the Minister and the Prime Minister respectively, complement each other rather than differ in substance.
Victor Laiviera
Feb 14th, 23:37
"If my memory serves me right, the EU had, last November, approved Malta's budget."
I do not recall that. Do you have any reference or link? I'm sure it would have been in the papers.
Victor Laiviera
Feb 16th, 10:37
Yoo hoo! Mr Black! Are you there?