The daily running costs of the government, or recurrent expenditure, ballooned since 2013, figures published by the National Statistics Office show.

An exercise conducted by this newspaper and based on official figures found that while, during the last Nationalist legislature, recurrent expenditure grew by an average four per cent a year, this almost doubled under Labour.

The figures (see table) show that, during the first four years of this administration (2013-2016), the increase in recurrent expenditure was across the board, with salaries paid to the public service and the ever-growing amount of government agencies being the biggest financial burden.

According to NSO figures, while between 2008 and 2012 recurrent expenditure increased from €2.1 to €2.5 billion, an average of four per cent a year, it went up by an average seven per cent per annum, from €2.5 billion to €3.2 billion, between 2013 and the end of 2016.

With the election being no more than a year away, political observers noted that recurrent expenditure was likely to continue to increase. Governments tended to close an eye with regard to recurrent expenditure during the final year of the legislature as they curried favours in their electoral campaigning.

Under the last Nationalist administration, the government had increased its recurrent expenditure by 5.3 per cent in 2012 when compared to the previous year – the highest in its five-year term.

The statistics show that while the lowest growth in recurrent expenditure in the past decade was registered in 2011, in the midst of a global economic downturn, the highest year-on-year increase in public spending on the ‘normal’ running of the country was registered in 2014, up 8.5 per cent.

Incidentally, during the same year, payment of government salaries had registered the highest increase till then. The government wage bill rose by eight per cent – or €50 million in one year.

By the end of 2016, public spending on personal emoluments reached €782 million, an increase of €128 million in a year.

A double digit increase was also recorded in operations and maintenance expenses, reaching €176 million in 2016. The highest increase in the last decade, 16 per cent, was registered in 2015.

In 2011, expenditure on operations and maintenance was cut by one per cent, the only decrease registered in the last decade.

Despite the substantial growth in recurrent expenditure, the Labour government still managed to cut the deficit as the economy registered above average growth rates.

Public debt is also on the decrease.

Last week, for the first time in the last 30 years, the government announced a surplus of €8 million in its 2016 budget. This was a result of a 47 per cent decrease in capital expenditure mainly on infrastructural projects. Recurrent expenditure increased by 6.7 per cent during the same year.

Both the Malta Employers’ Association and the Malta Hotels and Restaurants Association welcomed the news of the surplus but warned that improvement in public finances must be sustained.

Noting that the good news was the result of a cut in capital expenditure, the MEA said that present and future governments had to take measures to stabilise recurrent expenditure.

ivan.camilleri@timesofmalta.com