Government workers will get their pay raise and cost of living adjustment as planned on January 1, but some Budget measures will be put on hold once the Budget was not approved by Parliament yesterday, Finance Minister Tonio Fenech said this afternoon.
He said the finance ministry had been prepared for this eventually and it would ensure that there were sufficient funds for the ministries to enable the government to continue to function. Funds were being assigned in terms of the Constitution, which allows emergency funding for four months from the beginning of the year when the Budget is not approved.
This meant, he said, that if the election was held on March 9, a Budget would have to be presented by the end of April.
He explained that the Financial Administration Audit Act limited recurrent spending and laid down that funds may not exceed one-third of the total funds appropriated in the previous year. The law, however, did not specify how the funds may be used.
Mr Fenech said the issue was discussed in Cabinet this morning and it was agreed that wage increases and the COLA allowance would be given as from January 1 as planned.
Pensions and other social benefits that were considered as 'permanently appropriated' in terms of the constitution would be issued as usual. They included the raises in pensions.
The Children's allowance and the measures on property would, however, remain at this year's levels since the Budget was not approved.
The €300 allowance for the elderly would be given to those aged 80 and over, like this year. However the extension of this allowance to those aged between 78 and 80 cannot be given at this stage.
Capital spending which had already commenced would continue, but new projects announced in the Budget may not be started.
Projects funded by the EU may also be continued.
Mr Fenech said government entities would be allocated a third of what they were allocated last year.
The increases in duties on cigarettes, tobacco and petrol were being reversed to the pre-Budget rates.
Registration tax and income tax provisions also cannot come into force.
The €40m allocation to Air Malta can go ahead and the restructuring process will not be affected.
Mr Fenech said that at this stage, the subsidy to Enemalta would be a third of last year. This would not cause problems since the subsidy was paid in stages.
Should the PN be re-elected, all Budget measures would be brought into force, Mr Fenech said.