Indeed, a shocking matter
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Indeed, a shocking matter

The recent issue of the alleged, shocking €250 million overspend by the government for 2016 is an eye-opener to the independent-minded observer for the shabby way important issues are sometimes treated, with hardly any respect for the intelligence of the population.

Here we have a subject which for any Opposition should be an easy target: public expenditure.

The government is essentially an elected group delegated and trusted with people’s hard-earned money to be spent in a collective manner, primarily on security, health, education, pensions and family benefits. By its very nature, this process is surrounded by a real and founded fear that public money is not spent with the same attention, care and responsibility as if it were one’s own.

That is why the Constitution, the legal framework and the institutions and offices such as those of the Auditor General and the Fiscal Council, not least Parliament with its Public Accounts Committee, as set up in democratically advanced countries, are there to safeguard these monies.

The Opposition is given a crucial role in this large and intricate framework of checks and balances. It is its duty to be ever so watchful to ensure that the electorate has in it a counterbalance to whoever is in government. It would, in fact, be shirking its responsibilities if the Opposition does not criticise the government on a regular basis.

An annual opportunity comes in Parliament around December, when the government needs to seek the approval of the House to extend the public expenditure ceiling for that year in view of supplementary expenditure over and above what was already approved a year before for the Budget.

As it should, each year, an Opposition raises legitimate questions as to their justification and their effect on the ultimate bottom line – the country’s deficit and its debt.

Well, this time, our Opposition did and it did not. It was only in late December that one of the Opposition shadow ministers spoke about the supplementary expenditure. A €250 million alleged figure of over-expenditure was not something to let go by without making an overkill.

The MP from Gozo did, over various media channels.

It would take more than anact of financial wizardry for a finance minister to lose control over the public finances and, at the same time, reduce its deficit and the debt ratios

He said he was shocked beyond belief and accused the government of planning the approval for a time when people would be distracted by the holidays.

Not to be outdone, the three shadow ministers delegated with economic and financial matters held a press conference on the same shocking discovery.

And here lies the real matter to ponder. The electorate expects the Opposition and, in particular, the three shadow ministers delegated to these affairs, to be on top of the matter.

If they are discussing a small but important document tabled and debated a few weeks earlier in Parliament, they are expected to have the rudimentary data at their fingertips. At the least, the one and only total expenditure figure itself.

Instead, the honourable gentlemen and lady did not even consult the document and check the basic figure. Had they bothered, they would have found that the amount quoted by their colleague was erroneously overcalculated by about €100 million.

The format of the financial report was specifically established way back in the past to be most transparent, by using the same classification of the Budget financial estimates by ministry, by type of expense and with generous explanatory notes.

Furthermore, having been in government for some 25 years, one would have expected them to have checked whether this was indeed a shocking and exceptional figure, never to have occurred before or, if not, how it compares to previous years’ outturns.

They did not. Pity. If they had, they would have found that, at 3.6 per cent, this expenditure was the third lowest figure presented by the government since 2000. It compares favourably with 8.4 per cent in 2009 or 16.1 per cent the year before. What’s more, if they had bothered to open the pages they would have found the explanations they claim to be seeking.

It would take more than an act of financial wizardry for a finance minister to lose control over the public finances and at the same time reduce its deficit and the debt ratios, as attested to by the European Commission, the IMF mission and S&P, which have recently upgraded Malta for its prudent financial governance.

In this vein, if the evaluation by the shadow ministers had gone one notch higher, they would have noticed that there is a big difference between a year where both the revenue and expenditure turn out higher than projected, as has been the case in the last three years, thus leaving the deficit unaffected, and an expenditure overrun combined with a revenue shortfall.

The latter was the case every year, with one or two exceptions, during the previous, recent legislatures, resulting in unacceptable record deficits, touching the 9.1 per cent mark in 2003.

More relevant is that now, with the Fiscal Responsibility Act, all expenditures in excess of the Budget have to be approved by the Finance Minister prior to their being spent.

It is this kind of evaluation and in-depth analysis which the electorate rightly expects from the Opposition and not off-the-cuff shoddy remarks.

Of course, if it wants to be seen as a government-in-waiting.

Edward Scicluna is Minister for Finance.

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