(Adds Finance Ministry's reply)

The country’s financial situation has deteriorated despite an increase in government revenue from taxation, the Opposition spokesman for finance, Charles Mangion said.

In a statement, Dr Mangion said that the most recent statistics showed that between January and October the government increased its debt by more than €159 million over the same period last year.

This was in spite of raising the water and electricity surcharge to 95 percent and reducing capital expenditure.

Dr Mangion said that compared to the first 10 months of 2007, the deficit widened by more than €77.4 million to reach €243 million, four times more than what had been forecast by the government.

This figure did not include the €55 million the government would be allocating to shipyard employees. This led to serious doubts on whether the government would keep within the revised projection for this year’s deficit of €200 million.

The government, Dr Mangion said, borrowed more than €285 million in the first 10 months, an increase of nearly €160 million over the same period in 2007.

This phenomenal increase was reflected in a six percent increase in debt servicing costs which for the first 10 months of the year reached the sum of €167 million.

The country’s debt, which had accumulated under Nationalist governments, meant that the debt burden on each Maltese and Gozitan family was to be of more than €25,000.

In a reply to this statement, the Finance Ministry said this evening that the government was committed to reach its financial aims because these were important to attract foreign and local investment creating more employment and wealth.

However, the government could not ignore the international situation so it decided to postpone its aims by a year to invest in a wide infrastructual programme, environmental projects, education and training as well as in measures such as the reduction in income tax aimed to leave more money in the people’s pockets.

Dr Mangion’s statement clearly showed the opposition’s lack of vision because while the opposition was going through with an intense campaign against the revision of water and electricity rates, requesting the government to spend more to subsidise the utilities, and for the government to further reduce taxes, increasing deficit in the meantime, the opposition’s spokesman was criticising the deficit.