Public finance data are a good barometer of economic developments and policies. Indeed, government revenues are, to a large extent, driven by economic growth while expenditure dynamics reflect the government’s ability or otherwise in providing its services efficiently. In this respect, the latest statistics published by the National Statistics Office (press release 122/2014) provide useful insight.

Things are not as bright as this government wants us to believe.

The first figure which stands out is that the deficit widened by €48 million. While, in speeches, the government says that it wants to cut the deficit, in practice its policies inflate the deficit.

Can the Minister of Finance reassure us that the deficit for 2014 will be brought down to meet the country’s commitments with the European Union?

The latest announcement by the minister about the launch of an asset regularisation position seems to suggest that the government is trying to bridge its finances through extraordinary one-off measures, which would cast some doubt whether the country’s public finances are indeed on track.

What is worrying is the fact that the deficit widened because government expenditure rose at a very fast pace when compared to revenues.

The government cannot even claim that the increase in its spending was driven by the inevitable rise in expenditures on social security payments.

Indeed, spending on social security benefits actually declined on a year earlier. If this is the result of a genuine cut back on fraud, it is something positive but, given that in the press release no explanation is given, it is not possible to conclude with certainty.

As a passing comment, I would also encourage the NSO to be more transparent in its releases and provide more detailed explanations. This will ensure that the political debate and analysts’ comments will be based on a wider set of facts. Statistics serve a purpose when they can be properly understood rather than just published.

A major factor which explains the deterioration in the government’s fiscal position was attributable to the strong increase in contributions to government entities. In the first five months of 2014, these grew by over €28 million on a year earlier. Economic policies cost money. Can the government be transparent enough to say that the announced reduction in utility bills for this year is not the result of being able to produce electricity in a cheaper way but, rather, a clever spinning exercise, which translates into higher subsidies?

Likewise, can we get a clear picture of what is happening with the public transport saga? When in Opposition, it was easy to criticise but now that the Labour Party is in government, financially feasible solutions seem to be harder to find.

Statistics serve a purpose when they can be properly understood rather than just published

Another strong increase in expenditure was driven by higher spending on medicines. In itself, this is not a negative scenario but the problem lies in the fact that, despite the many attacks which the party in government used to make when in Opposition, it has failed to achieve any concrete improvements. Higher spending has not been matched by better quality health services.

Is the government doing anything to ensure that Maltese taxpayers are getting good value for their money?

Indeed, has the grouping together of the energy and health portfolios yielded any concrete benefits?

The current economic developments are sustaining a regular flow of tax revenues. The solid economic fundamentals built by the previous government continue to exert their positive influence. This goes to prove that when the Nationalist government was courageous enough to put forward the vision for a decline in income tax rates, it was basing itself on solid grounds and not on short-term political gains.

On the contrary, it seems that the government’s quest for popularity by offering jobs and consultancy posts to the selected few and other propagandistic policies are inflating expenditures at a faster pace. Indeed, the government is very good at portraying the feel-good factor but let’s hope that this does not vanish in thin air and down the line we will have to pay a high price for it.

The finance minister is the defender of taxpayers’ money but, given the strong influence of the Prime Minister and his entourage, keeping control of government expenditures seems to be a tough challenge.

Kristy Debono is a Nationalist MP.