A European Commission report has concluded that public healthcare expenditure efficiency in Malta is weak while that of tertiary education expenditure is below the EU average.
The report, entitled "The Efficiency Of Public Expenditure In Malta" by Ivan Ebejer and Ulrike Mandl, who work for the Directorate-General for Economic and Financial Affairs, focused exclusively on public spending in education and healthcare, which together represent around 30 per cent of total government expenditure in Malta.
The findings show that, whereas public expenditure in Malta appears relatively efficient at the primary and secondary levels of schooling, it is less so at the tertiary level.
"These results seem to be confirmed when efficiency is assessed from the output side. It is argued that cultural impediments, for instance those hampering female participation in tertiary education, may partly explain the outcome. Similarly, the extent to which the cost incurred by the government in giving maintenance grants leads to further increased participation in tertiary education is doubtful," the report says.
Concerning health, the results show that, even in the context of poor outcomes for the other member states, the efficiency of public healthcare expenditure in Malta is weak.
"Although the results are indicative and should therefore be interpreted with caution, the findings suggest that there is scope for rationalising tertiary education and healthcare spending without compromising outcomes. In these areas, Malta appears to perform inefficiently due to high spending rather than weak outcomes. It is therefore crucial to identify the institutional and structural factors that prevent Malta from achieving higher public spending efficiency in these areas," the authors say.
Public spending on education in Malta amounts to around 5.5 per cent of GDP, higher than the EU average of 5.2 per cent. More than 60 per cent of public education expenditure goes on staff salaries which is slightly higher than the average for the EU. Another one third goes on "other current expenditure" which is higher than the EU average. Around 65 per cent of the "other current expenditure" consists of grants awarded to students attending post-secondary and tertiary institutes and subsidies to Church schools. Capital spending amounts to 5.4 per cent of total education expenditure, which is significantly below the EU average.
"During the past years the cost of operating Malta's education system has been on the rise. While spending per student in euro purchasing-power standards terms has been modest in Malta compared to the EU average, expenditure per students expressed as a share of per capita GDP has been rising and has exceeded the EU average since 2003," the report says.
The report highlights that total healthcare expenditure in Malta is above the EU average. Public spending accounts for around 80 per cent of total health expenditure. At around 6.5 per cent of GDP, public expenditure on healthcare is at par with the average for the EU. However, wages and salaries constitute around half of public health expenditure, compared to around 27 per cent in the EU. While public spending on primary and secondary education exhibits a high level of efficiency - mainly due to a low spending per student as a ratio of GDP - the report points out that tertiary education in Malta appears to produce far less efficient outcomes.
"Although most of the EU member states also score poorly, Malta's performance is below average. A score of 0.44 denotes that at least the same level of output could be attained with 44 per cent of the present level of expenditure per student, implying important scope for improving efficiency at this level of education.
"This gap seems to mainly reflect a low enrolment rate of tertiary students which, despite increasing during the past decade, stands at around one-third of the most efficient countries. According to the Lisbon scoreboard, Malta has persistently recorded poor results as far as educational attainment is concerned. Given the importance of tertiary education in the context of the goals set in the renewed Lisbon strategy, it would be meaningful to assess efficiency from the output side," the report says.
The report says that the reasons underlying the low efficiency of the tertiary education system could be manifold.
"For example, although higher than the EU average, the number of women per 100 graduating men is between 64 per cent and 94 per cent of the most efficient member states suggesting that cultural barriers may be hampering participation, for instance, among females. In this context, the relatively generous grants awarded to tertiary education students, while increasing public spending, appear to be delivering less than satisfactory outcomes," it says.
On the efficiency of public healthcare expenditure the report says: "Malta scores below average with an efficiency score of around 0.38 for each performance indicator. In other words, expenditure could be 62 per cent lower and achieve an equivalent outcome".
It adds: "Taking the life- expectancy rate indicator, Malta's relatively low efficiency score seems to be related to high public health spending per capita, which is around 17 per cent above that of the most efficient member states in the sample. Similar patterns are observed for the infant death rate and SDR indicators. In both cases, per capita expenditure in Malta is substantially higher than the best performers. These results seem to suggest that either public expenditure could potentially achieve better outcomes in Malta or that comparable outcomes could still be attained if health spending is lowered."
The views expressed in the Malta report are those of the authors only and do not necessarily correspond to those of the Directorate-General for Economic and Financial Affairs or the European Commission.
The report, entitled "The Efficiency Of Public Expenditure In Malta" by Ivan Ebejer and Ulrike Mandl, who work for the Directorate-General for Economic and Financial Affairs, focused exclusively on public spending in education and healthcare, which together represent around 30 per cent of total government expenditure in Malta.
The findings show that, whereas public expenditure in Malta appears relatively efficient at the primary and secondary levels of schooling, it is less so at the tertiary level.
"These results seem to be confirmed when efficiency is assessed from the output side. It is argued that cultural impediments, for instance those hampering female participation in tertiary education, may partly explain the outcome. Similarly, the extent to which the cost incurred by the government in giving maintenance grants leads to further increased participation in tertiary education is doubtful," the report says.
Concerning health, the results show that, even in the context of poor outcomes for the other member states, the efficiency of public healthcare expenditure in Malta is weak.
"Although the results are indicative and should therefore be interpreted with caution, the findings suggest that there is scope for rationalising tertiary education and healthcare spending without compromising outcomes. In these areas, Malta appears to perform inefficiently due to high spending rather than weak outcomes. It is therefore crucial to identify the institutional and structural factors that prevent Malta from achieving higher public spending efficiency in these areas," the authors say.
Public spending on education in Malta amounts to around 5.5 per cent of GDP, higher than the EU average of 5.2 per cent. More than 60 per cent of public education expenditure goes on staff salaries which is slightly higher than the average for the EU. Another one third goes on "other current expenditure" which is higher than the EU average. Around 65 per cent of the "other current expenditure" consists of grants awarded to students attending post-secondary and tertiary institutes and subsidies to Church schools. Capital spending amounts to 5.4 per cent of total education expenditure, which is significantly below the EU average.
"During the past years the cost of operating Malta's education system has been on the rise. While spending per student in euro purchasing-power standards terms has been modest in Malta compared to the EU average, expenditure per students expressed as a share of per capita GDP has been rising and has exceeded the EU average since 2003," the report says.
The report highlights that total healthcare expenditure in Malta is above the EU average. Public spending accounts for around 80 per cent of total health expenditure. At around 6.5 per cent of GDP, public expenditure on healthcare is at par with the average for the EU. However, wages and salaries constitute around half of public health expenditure, compared to around 27 per cent in the EU. While public spending on primary and secondary education exhibits a high level of efficiency - mainly due to a low spending per student as a ratio of GDP - the report points out that tertiary education in Malta appears to produce far less efficient outcomes.
"Although most of the EU member states also score poorly, Malta's performance is below average. A score of 0.44 denotes that at least the same level of output could be attained with 44 per cent of the present level of expenditure per student, implying important scope for improving efficiency at this level of education.
"This gap seems to mainly reflect a low enrolment rate of tertiary students which, despite increasing during the past decade, stands at around one-third of the most efficient countries. According to the Lisbon scoreboard, Malta has persistently recorded poor results as far as educational attainment is concerned. Given the importance of tertiary education in the context of the goals set in the renewed Lisbon strategy, it would be meaningful to assess efficiency from the output side," the report says.
The report says that the reasons underlying the low efficiency of the tertiary education system could be manifold.
"For example, although higher than the EU average, the number of women per 100 graduating men is between 64 per cent and 94 per cent of the most efficient member states suggesting that cultural barriers may be hampering participation, for instance, among females. In this context, the relatively generous grants awarded to tertiary education students, while increasing public spending, appear to be delivering less than satisfactory outcomes," it says.
On the efficiency of public healthcare expenditure the report says: "Malta scores below average with an efficiency score of around 0.38 for each performance indicator. In other words, expenditure could be 62 per cent lower and achieve an equivalent outcome".
It adds: "Taking the life- expectancy rate indicator, Malta's relatively low efficiency score seems to be related to high public health spending per capita, which is around 17 per cent above that of the most efficient member states in the sample. Similar patterns are observed for the infant death rate and SDR indicators. In both cases, per capita expenditure in Malta is substantially higher than the best performers. These results seem to suggest that either public expenditure could potentially achieve better outcomes in Malta or that comparable outcomes could still be attained if health spending is lowered."
The views expressed in the Malta report are those of the authors only and do not necessarily correspond to those of the Directorate-General for Economic and Financial Affairs or the European Commission.