Opposition finance spokesman Charles Mangion said today that official figures on government finances in January showed that the situation was still 'precarious'.
He said that that although government revenue had increased by €4 million compared to January 2009, this was likely the result of extraordinary income that stemmed from the tax amnesty. Ordinary revenue was €13 million less than in January 2008. This was the result of lower income for business and families.
Dr Mangion said that although the deficit had narrowed, this did not reflect government efficiency, but rather, a halving of outlay on capital projects, even though the government had claimed it would boost capital expenditure to stimulate the economy.
Dr Mangion welcomed the increased outlay on energy support measures and urged the government to continue to invest in such initiatives for the good of the environment and the economy itself..
He noted that during January, the government debt increased by more than €295 million to almost €3.9 billion.
He said such figures showed that the government was in a bind: Because of the deficit and the debt it could not make the necessary capital investment, and this was in turn slowing the recovery from the recession.
FINANCE MINISTRY REACTION
The Finance Ministry said Dr Mangion was trying to paint a different situation to that found during scrutiny by the EU institutions just a few weeks ago.
It recalled that the European Commission had recommended a one-year postponement of the deadline for Malta to reduce its deficit to the levels set by the Growth and Stability Pact. In its report the Commission said Malta was taking effective action to correct the deficit, but it also acknowledged that the impact of the international economic crisis was bigger than expected.
Despite what the Opposition claimed, the European Commission’s findings were the best evidence of how right the government was in 2008 and 2009 to put economic stability at the head of its agenda. Jobs and investment were, likewise, a government priority, and last year as well as this year, it was directing all its resources to this end.
The ministry said the European Commission had also acknowledged and praised the government’s measures to support the economy as well as its plans for substantial investment in the infrastructure.
Just this week, EU figures showed how, as a result, of such measures unemployment in January decreased when compared to December and Malta’s jobless figures were below the EU average. Malta was also one of only four EU countries which saw trade growth in January.