The Finance Minister is confident Brussels will lift the excessive deficit procedure instituted against Malta last year, even though he admits that Brussels is still “suspicious” about the country’s financial plan.
Addressing the latest in a series of post-Budget consultation meetings at St George’s Square, Valletta, Edward Scicluna said the government was set to end this year with a 2.1 per cent deficit, even though the Commission’s estimate was 2.5 per cent. He added that this was also the case for last year when the actual deficit of 2.7 per cent was well below the Commission’s projection of 3.4 per cent.
The issue of precarious employment was being taken very seriously
As for 2015, Prof. Scicluna said that the government’s target was an ambitious 1.6 per cent, one per cent lower than the Brussels projection.
He said, however, that the EU was wary “due to the fact that in November 2012 [under a PN government] Brussels had lifted the excessive deficit procedure, only for Malta to go back in it a few months later [soon after Labour was elected to government]”.
Touching on the Commission’s opinion on the Budget, he said that Malta, as well as nine other countries, was declared “clean” in terms of its macro-economic imbalance. “This meant that no red lights were on for the economy, contrary to the Opposition’s claims,” he added.
In its report the Commission warned that the 2015 Budget plans were not on track as Malta risked not meeting strict EU rules, in particular on its deficit.
Malta Council of Economic and Social Development chairman John Bencini, who was in the audience, pointed out that in the run-up to the Budget employers and unions had express concerns over a decline in exports and precarious employment.
The minister said that the issue of precarious employment was being taken very seriously, but at the same time warned that the government had to keep an eye on the country’s competitiveness.
€282.6 million deficit in the first 10 months
During the first 10 months of the year government expenditure exceeded revenue by €282.6 million, the National Statistics Office said on Friday.
At the end of October, total government debt reached €5.37 billion, up by €377.5 million over the corresponding period last year.
Recurrent revenue registered an increase of €183.8 million, which offset a higher expenditure of €180.7 million thereby narrowing the shortfall by €3 million, when compared with the corresponding period last year.
Between January and October, recurrent revenue rose by 7.9 per cent over the previous year and stood at €2.5 billion.
The main contributors to this increase were income tax (€65.6 million), social security contributions (€46.5 million), grants (€39.5 million), and VAT (€36.5 million). Conversely, Customs and Excise duties registered a decline of €28.4 million.
The NSO said that recurrent expenditure increased in the first 10 months by €162.2 million, mainly as a result of higher spending on programmes and initiatives (€82.7 million).
In addition, personal emoluments and contributions to government entities increased by €40.9 million and €32.9 million respectively.
Operational and maintenance expenditure went up by €5.7 million.