Finance Minister Edward Scicluna said the law aimed to boost efficiency in expenditure. Photo: Darrin Zammit LupiFinance Minister Edward Scicluna hailed as a “milestone” the new law that is set to control public expenditure and the way people’s money is spent.
He said that the recently enacted Fiscal Responsibility Act will ensure accountability and transparency in the way taxpayers’ money is spent.
Thanks to the law, the government is now legally obliged to enhance its accountability with the taxpayers and control how it disseminates the money.
It will also eliminate the secrecy of the annual Budget and the resultant speculation.
Addressing a press conference, Prof. Scicluna said the aim of the law was to increase efficiency in expenditure, set ceilings and introduce more controls on public expenditure.
He said although the government had obligations with the EU, there were no legal provisions on transparency before this law was enacted.
In line with the new law, the government would publish a three-year rolling plan listing its fiscal policy and priorities.
It would create a Fiscal Council which would oversee the plan and prepare an annual report on its implementation.
Fiscal Responsibility Act will ensure accountability and transparency in the way taxpayers’ money is spent
The council’s chairman would be appointed following consultation with the Opposition and could only be removed through a parliamentary resolution.
Prof. Scicluna said that whereas in the budget the government looked back at the preceding year, there would now be a detailed report in March or April.
The report will be compiled after collecting the data of the preceding year.
He said there would also be a half-yearly report on that year’s plan with details on any variances.
This would be followed by the draft and then the actual Budget.
Although the law also stipulated contingency reserves to cover slip-ups or over-expenditure, these would have to be justified with the Fiscal Council, which would be answerable to the Public Accounts Committee.
Answering a question by Times of Malta, Prof. Scicluna said the government had no plans to change the formula used to calculate the annual cost of living adjustment.
He said this was an automatic mechanism used since 1991 which had “worked”, adding that no changes were envisaged unless there was consensus among social partners sitting on the Malta Council for Economic and Social Development.