Government revenue exceeded official projections by €42million in the first half of the year, Finance Minister Edward Scicluna said yesterday.
Speaking at the unveiling of the 2017 pre-Budget document, themed Prosperity with Social Justice, Prof. Scicluna said the government had spent about €13 million less than expected.
In real terms, government revenue totalled €1.6 billion in the first six months of 2016, he said, while expenditure amounted to €1.7 billion.
A ministry spokesman said later the variations between projections and actual figures were “normal”.
The government’s projections are always conservative
“The government’s projections are always conservative, to play relatively safe, the reason being that if the basic thresholds are not met then it could impact our financial commitments with Brussels,” the spokesman said.
The figures show the government had made about €17 million more from taxes, fines and licences than was projected. It had also made €15 million more from income tax and €6 million more from Customs and excise duties.
Turning to what people could expect from the next Budget, Prof Scicluna said it would be “one for the second part of the legislature”. “The first half of this legislature was aimed at allowing the government to have more room to manoeuvre financially.”
The government wanted to continue consolidating finances by reducing the deficit, he said. It also wanted to ensure that all of society was catered for and that no one would be left on the edge, he added.
According to the document, the government is aiming for a deficit target of 0.7 per cent of GDP this year, which would drop to 0.6 per cent in 2017 and 0.2 per cent by 2018.
The document says Malta had continued to be “one of the EU’s top economic performers”, reaching a real economic growth of 6.4 per cent, three times the EU average.
The document highlights a number of problem areas to be addressed, including the island’s early school leaving rate. Nearly one in five students left school early in 2015, a long way away from the EU 2020 target of 10 per cent.
The situation in the law courts was also raised in the document, which says the government is looking for ways to speed up proceedings, particularly when it came to cases involving financial insolvency.
“It is also placing due importance on bolstering alternative dispute resolution mechanisms through its commitment to expand the mediation centre,” Prof Scicluna said.
Social inclusion and problems faced by those on a lower income were also a priority. On such problem was the rising cost of rent, which the pre-Budget document says, will be addressed by reviewing the government’s rent subsidy scheme as well as other initiatives to introduce more affordable housing.
The Times of Malta reported earlier this week that rent prices had shot up by nearly 40 per cent since 2012.