No cause for concern over rising deficit, says Fenech
Official figures have shown that Malta’s deficit increased by €64 million compared with last year, but Finance Minister Tonio Fenech yesterday said there was no cause for concern.
The minister also noted that, with Government having no 2013 Budget to work with, expenditure was likely to be muted in the run-up to March’s general election.
Revenue the Government is due to collect in the first two months of the year would even out the figures and keep Malta on track to meet its deficit and debt targets, the minister said.
“These statistics are issued on a cash basis, so they don’t necessarily reflect the final figures,” Mr Fenech said.
“Income tax revenue for the first two months of any given year is tallied up with the previous year’s income, as is January VAT revenue. So while expenditure stops at the turn of the year, Government revenue continues to flow in for a further couple of months.”
Asked why this would make a difference, given that last year’s provisional totals also included this caveat, Mr Fenech pointed to economic growth.
“It isn’t the same as the previous year, because the economy has grown and that, in turn, bumps up tax revenues,” he said.
Official statistics released earlier last week showed a two per cent gap between Government expenditure and revenue for the first 11 months of this year. As a result, the deficit – the gap between money flowing in and that going out – now stands at €342 million.
Cynics expecting the Government to start flashing the cash in the months preceding the election are likely to be disappointed, with Mr Fenech saying the Government’s hands were tied.
“Expenditure is much more constrained now that we have no working Budget. The Government can’t, for the sake of argument, start next year’s Budget and decide to spend six month’s worth of expenditure in the first three months of the year.”
The law, the minister said, forbade the Government from spending more in recurrent expenditure than it had in the first four months of 2012.
Mr Fenech also singled out assistance given to struggling energy corporation Enemalta as having distorted the figures somewhat.
“Enemalta is under severe pressure from high oil prices, but the Government has taken a conscious decision not to raise electricity tariffs. That has meant that Enemalta has fallen back on excise duty payments.”
Enemalta is believed to owe the Government some €50 million in duty dues.
The Government has successfully lowered the national deficit over the past four years to below three per cent of GDP, convincing the European Commission to stop excessive deficit procedures it had started against Malta.
Mr Fenech has said he expects the country to end this year with a 2.3 per cent deficit, falling to 1.7 per cent by the end of next year. Rating agencies and the European Commission have projected slightly less optimistic numbers, but expect Malta to remain within acceptable deficit parameters.
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Kenneth Azzopardi
Dec 31st 2012, 16:04
There is certainly no cause for concern to worry about our escalating financial debt mountain, money is not a problem we just borrow some more from the maltese people to repay our loans. The problem lies with all those people who actively purchase government bonds which keep on fuelling our national debt of over 6 billion euro so just continue showing your support when the next bond issue comes.
pat muscat
Dec 31st 2012, 08:37
One must never forget that it was the year by year running defects and eventually debt that brought Greece,and Ireland down. I remember the Greek and Irish Governments telling its citizens- a month or so before the crash, that their finances were in order!
vincent Lia
Dec 30th 2012, 22:31
To Carmel Zammit you obviously do not want to see or hear so there is no point in telling you. I listened to Folji and they were boasting that Malta got a good credit rating because of JM. What a joke. Mr Zammit if Malta followed Greece we would have been in the same situation please open your eyes. Greece have not got a good credit rating Mr Zammit, it is bankrupt.
David Scicluna
Dec 30th 2012, 21:53
Go tell it to the marines Tonio.
Louis Craus
Dec 30th 2012, 20:52
Thabblux raskom ta, il-finanzi fis-sod qedin,tinkwetawx,....hekk jew hekk id-djun ihallsuh uliedna u ulied uliedna. Awguri.
Joe Muscat
Dec 30th 2012, 19:56
I think that Gonzi PN has something up his sleeve.....My suspicion is OIL!
Ronnie Callus
Dec 30th 2012, 20:12
He may find oil in his car engine or under, it if it leaks.
Charles Massa
Dec 30th 2012, 19:55
Qabel l elezzjoni ta 2008 Gonzi kien qal li finanzi tal pajjiz huma fis sod u wara anki wedna li matul din il legislatura ikona budget surplus. Imma dejn fil pajjiz kompla jizdied u qieghdin inhalsu interessi aktar milli ninvestu fl edukazzjoni u sahha. F din is sitwazzjoni gabna GONZIPN. Mhux ta b xejn issa qieghed jistahba u jimbotta lil Simon Busuttil
Ronnie Callus
Dec 30th 2012, 19:48
Kif jista l-poplu jibqa jafda lilek u l-Gvern tieghek meta ilek sejjer bdin il-kantalina matul s-snin kollha u mill-hazin dejjem sejrin ghall aghar fid-dejn ta' dan il-pajjiz. Mela ma' tafx li thott minghajr ma' trodd is-SWAR THOTT, Sur.Tonio. Lanqas li kien xi tifel tal-Primarja fil-finanzi ghax zgur jaf jghamel is-sommom ahjar.Taf li anke l-Gvernatur tal-bank Centrali kien gibidlek l-attenzjoni
Ronnie Callus
Dec 30th 2012, 19:22
Tista tghidilna Tonio minhu kredibli f'dak li qed tghid, jekk hux int jew Josef Bonnici ex-Ministru minn taghkom li qed jiehu hsieb is-Central Bank li tghidtx kemm ilu jigbdilkom l-attenzjoni rigward dan id-dejn kollha Nazzjonali kif ukoll id-Deficit gholi li qed ikollna nhabbtu wiccna mieghu.Kif jista wiehed li ghandu rasu fuq ghonqa ma'jinkwetax kif qed tghid int.Veru tfajt pajjiz ghal gol-hajt.
vincent Lia
Dec 30th 2012, 18:26
This morning on Folji LP representatives boasted that the good credit rating of Malta was due to the PL because the budget's 'qafas' is going to be kept. What pathetic people, Malta's healthy situation is due to the clever investments by this government, the good budget came as a result of healty finances in the past. Other countries could not do a good budget because of bad debt.
Carmel Zammit
Dec 30th 2012, 19:06
Could you sensibly list the investments? Healthy finances? Are you really convinced that our finances are healthy after Gonzipn's chase of the same road that led Greece, Italy, Portugal, Spain and Ireland to near bankruptcy? Today's Minister's assessment and the claim that our finances are healthy only assure us that Gonzipn if re-elected would only guarantee bankruptcy.
Joe Bonanno
Dec 30th 2012, 22:50
The PN gov’t has been a total disaster. Credit Card economics at its worst.
Malta’s debt/gdp is higher than Spain's and Cyprus’s. Can you imagine if roles were reversed and the PN had inherited this mess from the PL? Where would we be? Not even capable of producing a single balanced budget.
But, the PN hierarchy keeps spouting little catchphrases and the sheep keep repeating them.
GL Calleja
Dec 30th 2012, 14:03
NO problem the man says, NO problem. The people who say that are people that have plenty of money to spend and squander. Same here, except the financial Minister is spending our money, the TAX PAYER's money and not his own. Look at what happened to other countries like Greece where the politicians fleeced and squandered the country's finances. Never take anything for granted. Happy New Year.
j brincat
Dec 30th 2012, 14:00
So you see Dear Tonio, as can be seen from comments below, you did NOT convince ANYONE to calm his/her mind!
But Toppled GonziPN goes on ignoring the red light as if nothing is happening around him!
AND I have a hunch that the deficit will worsen still as the election fever grips on and on!
But then is really deja' vu!!!!
jb
Charles Cremona
Dec 30th 2012, 13:37
The next government of whatever colour is going to face a major fiscal problem, an increasing budget deficit that has to be brought into line and a massive national debt which is now approaching over 80% of GDP when you add what entities like EneMalta owe. If nothing is done we will end up like Cyprus, an island that a few months ago was very prosperous and is now bankrupt begging for a bailout.
GL Calleja
Dec 30th 2012, 15:07
If and I mean if the PL wins the upcoming election,Joseph Muscat will be facing the same deficit problems that President Obama inherited from George W Bush. A runaway deficit which will be very hard to overcome. That is one of the sad parts of politics. When one leaves the other has to do the clean up and sometimes that is not so easy to do.
David Magro
Dec 30th 2012, 15:44
Hon.tonio fenech said there is nothing to worry about....what about enemalta? I believe that in the coming months, moodys and other respectable economic houses will voice their concern on enemalta and this will effect our credit rating....this picture is due to the mess that gonzipn has left our house in....and they are asking us to trust them again?
Ronnie Callus
Dec 30th 2012, 19:53
Tonio Fenech can rest his mind but not of others because he took the 500 euro weekly increase back dated from 2008 not us given a mere 1.16 euro. He told us TITHANZRUX miskin.
Malcolm Farrugia
Dec 30th 2012, 13:35
That's what happens when we've got a Government who's only capable of managing this country on a cash basis only system. I have expected Tonio Fenech as a qualified accountant to address the nation's finances and projects on an accrual system, alas nothing have changed from the way public monies were spent from 1987 onwards!
And he still has the gall to say that are finances are in order!
George Cassar
Dec 30th 2012, 12:44
Dear Minister
Can you please inform us about this year's debt figure? Can you please confirm if this is DOUBLE to that of last year?
Is this article in aid of our end-of-year celebrations?
j brincat
Dec 30th 2012, 12:07
"No cause for concern over rising deficit, says Fenech"
And why should we put our mind at rest because he says so!
How can we remain calm when under his ministry we have NOW a record public debt of nearly 5 BILLION and as at end of November there as an INCREASE of €210 million over last year. Debt servicing is now ASTRONOMICAL!
Some reassurance, indeed!!
jb
jesmond zammit
Dec 30th 2012, 11:49
Hold up fuq dan il poplu ...
Charles Caruana Carabez
Dec 30th 2012, 11:48
It is wrong for some people to think that all the negative comments are inspired by rabid partisan anti-pn activists. There is a genuine concern among the people that some sort of bubble is about to burst; I merely record here what I hear, from various people. Also, from what I hear and experience, some bubbles seem to have have already burst., and quite a few are in pain.
ANTHONY PAVIA
Dec 30th 2012, 12:46
Give it 6 months to a year, and then hear property speculators scream! Some have started already due to being indebted to small banks with foreign shareholders. Other speculators have already provided for this by taking on local big Banks and Insurance companies as shareholders. The rest are being kept quiet for the time being.
Victor Calleja
Dec 30th 2012, 11:46
Dan haqqu l'Oscar ta liskuzi. Dejjem jara kif se jgib il bocca vicin il likk. Hallina Tonio ghax kollox ghad irid jitla fil wicc.,
R Axisa
Dec 30th 2012, 17:14
U veru haqqu l-oscar tal-iskuzi. Simon Busuttil ukoll qal li Tonio Fenech kien skuza ruhu meta mar jara l-futbol barra minn Malta b'xejn. Qal li kien zball min-naha ta' Tonio Fenech, imma kien skuza ruhu! Ma' nahsibx li b'daqshekk il-poplu serrah rasu.
Charles Busuttil
Dec 30th 2012, 11:38
Hon. Minister, do you know what concerns us? What concerns us that we have a boy trying to do a man's job!
Mr Terry Gosden
Dec 30th 2012, 11:26
I thought the Greeks said the same thing before they went bankrupt.
Charles Cremona
Dec 30th 2012, 11:21
Fenech might not be concerned but the EU will, and as last year they will order the next Finance minister to cut the budget or else.
George Camilleri
Dec 30th 2012, 11:15
how cute... now the Maltese nation can sleep soundly knowing that the oracle is telling us not to worry
Joanne Camilleri
Dec 30th 2012, 11:06
Kemm hu konsistenti r ragel!!
Even when the 500 euros increase was put in his account he didn’t show any cause for concern….but what if the deficit was put also on his visa?? Will he give us the same reply?!
Pav Elliot
Dec 30th 2012, 10:56
Tax Payers are very concerned Mr. Fenech. Very
And the fact that you said earlier in the year that the cost overrun would be compensayed by an increase in revenue has turned out to be totally untrue.
We are not amused, and we cannot accept such a laize faire attitude with our hard earned taxes.
K CASSAR
Dec 30th 2012, 10:53
The official figures may be one thing, but I wonder if they include the other expenses like the new parliament that seem to be forgotten in the blue eyed vision this government has of the countries finances......I like many others dread what may be uncovered in the coming months! Way to go Tonio!!!!
Mr Joe Cardona
Dec 30th 2012, 10:53
Dazgur li ma jinkwetax il-Ministru Fenech, hu rasu mistrieha mhux bhal dak tal-povru haddiem bil-minimum wage jew aktar min hekk jinsab bla xoghol.
Aktar ma tersaq l-elezzjoni aktar juru li huma arroganti.
Alexander Brincat
Dec 30th 2012, 10:42
No worries. Don't panic. We're still safe.
That is what Captain Schettino said before the ship started sinking.
Ronnie Callus
Dec 30th 2012, 20:09
Exactly so Mr.Brincat.We are in the same scenario and worse because the liner which Dr.Gonzi is steering has got no life boats.
Noel Damato
Dec 30th 2012, 10:38
Jekk jerga jitla Gvern ta GonziPN malajr jirmedja billi jgholi t-tariffi u taxxi ohra u l-poplu jhallas halli jivdi d-djun li jkunu ghamlu ic-cwiec Maltin.
Peppi Borg
Dec 30th 2012, 10:37
This year's increase in national debtis two times that quoted by the minister in the 2011 budget speech! What is his excuse?So besides having Enemalta owing 50 million euro for the Marsaxlokk powerstation it also owes another 50 million euro to the government. So that's another reason behind gonzipn's reasoning about energy bills! And then they have the guts to tell us Finanzi fis-sod!
Noel Damato
Dec 30th 2012, 10:36
Dan huwa gvern li ma jinkwetax dwar id-deficit bhal ma nkwetax meta bil-mohbi ta kulhadd zied lilhom infushom zieda ta 500 euro fil -gimgha.
Peppi Borg
Dec 30th 2012, 10:31
A minister who will remain famous in history for his ability to exhibit expired products in a shop window! This is a deja vu of the picture we had during the last election of 2008. Gonzipn never showed concern for public funds so no surprise!
HENRY FENECH AZZOPARDI
Dec 30th 2012, 10:26
Araw kemm jitla aktar jekk Muscat innaqas id dawl u l ilma. Issa forsi Louis jghidilna li ma jistax ikun li l lejber izomm din il wegheda. J'Alla Louis izomm mall principji tieghu u jwieghed dak biss li jista jinghata u mhux biex jigbor il voti. Il poplu jtellek u il poplu jnizlek. Laqwa kif qal sewwa il President ikollna dibatitti pacifici u bla tajjjir. Il poplu jifghem, ma hemx bzonn ta nsulti
John B. Borg
Dec 30th 2012, 12:44
Is this all you could come up with in defence of another failure by Tonio Fenech. We have been promised miracles in budget balances but what we get is total mismanagement and a national debt amounting to 4.7 billion eauros which a new government after the next elections will have to face.
However I agree with your satement "il-poplu jtellek u l-poplu jtellek" Hekk se jigrilu Gonzi/Simon PN f'Marzu
B. Borg
Dec 30th 2012, 12:47
Henry GonziPN stess qal biex niftakru f'dak li ghamel mhux f'dak li jghid... Fit 8 ta' Marzu, jien se niftakar il 500 euro, u il-voti bil-qalb
Carmel Zammit
Dec 30th 2012, 10:19
How can Mr. Fenech claim more growth of the economy this year than last year when figures show that unemployment has been on the rise for consecutive months now? The rise in deficit is more than Euro 64 million when there should have been a decline of 50 million bringing the difference to more than 114 million. Mr. Fenech is only trying to exculpate himself from his repeated budgetary blunders.
Carl Carabott
Dec 30th 2012, 10:17
Nafu li ma jinkwetax dwar il-finanzji pubbliċi Mr Fenech,
Nafu li inkwieta xi ftit meta il-PM waqqaf il-famuża 500€.......
Il-PN misshom jindunaw li bis-saħħa ta' Fenech ħarġet fiċ-ċar il-qasma li hemm bejn il-kabinett u l-amministrazzjoni...(fid-dep leader contest.....)
VINCENT WILLIAMS
Dec 30th 2012, 10:09
Onor. Minister tell that to the European Union, to Greece, Italy, Ireland and Spain and see what they tell you !!
Peter Murray
Dec 30th 2012, 10:05
The only concern we have is that we have to wait until 09th March to get rid of the concerns we do have
A Spiteri
Dec 30th 2012, 10:04
Why should anyone take this person seriously?!
He's the same person who assured us we will make a profit out of the Greek bailout!
Michael Magri
Dec 30th 2012, 09:43
No cause for concern over rising deficit, says Fenech
Imma dan mohhu sew jew.. Jew forsi qed jipprova jiccajta xi naqra ghax forsi ghadu bil-hsieb li ahna `lkoll qatta Maltin `Cwiec`..!!
Hallina Ton trid...!!!
Anthony Mizzi
Dec 30th 2012, 09:39
UZZZGGGURRRR.... "no concern" ghax fil-kont tal-pajjiz u mhux fil kont tieghu qieghed id-deficit!
Please choose the reason of your report below: