The Government needs a surplus of €180 million in the remaining months to reach its deficit target which is “a very difficult” feat, according to the Labour Party.
We don’t want payment cheques to be left hidden in the drawer before the election so that on paper the financial situation will look good- Edward Scicluna
Telling the Government to “come clean” on the true state of public finances yesterday, Labour spokesman Karmenu Vella yesterday said the highest ever surplus achieved in the closing months of any year was €40 million.
“The truth will eventually come out but it may be very late in the day,” he said.
Quoting recent figures published by the National Statistics Office, which showed a deficit of €333 million in July, Mr Vella said this was a far cry from the end-of-year target of €154 million.
The Government is banking on collecting the bulk of its revenue towards the end of the year, but Mr Vella said: “The last time the Government’s cash flow position was like today’s, in 2010, the year closed with a deficit of 3.7 per cent.”
The Government had set itself a deficit target of 2.3 per cent when presenting the Budget. Finance Minister Tonio Fenech recently acknowledged the target may be missed but insisted the deficit would still be well below the EU limit of three per cent. Mr Vella also questioned growth forecasts. He said the Government was euphoric because the economy exited the recession by registering growth of 0.9 per cent in the second quarter but this was not enough.
“To reach its own growth forecast the economy has to grow by 4.6 per cent in six months,” he insisted.
Flanked by Labour economy spokesman Charles Mangion and MEP Edward Scicluna, Mr Vella said the Gonzi administration was responsible for almost doubling the country’s debt since 2004.
Dr Mangion said private investment was on a downward trend since 2008 and wage growth had slowed down.
He noted that inflation was persistently higher than the EU average and this further eroded purchasing power.
Prof. Scicluna said the Government’s accounting system was on a cash basis, which meant that payments due would not be registered as expenditure until they were actually made.
“We don’t want payment cheques to be left hidden in the drawer before the election so that on paper the financial situation will look good,” Prof. Scicluna said.
He said the country had to know the truth and the Labour Party would hold the Government responsible. “I will also hold the European Commission responsible to make sure that the Government accounts are in order.”
In a statement later, the Finance Ministry said the Government would continue to implement an economic strategy that is bearing fruit in spite of the Opposition’s misinformation campaign, which put investment and jobs in danger.
The ministry accused the opposition of ignoring the positive international approval the Maltese economy had been given, following detailed evaluation by the World Economic Form and the credit rating agency Moody’s.
ksansone@timesofmalta.com