While welcoming the decrease in government's deficit in the first quarter of 2015, the Opposition is calling on government to ensure that the deficit is being reduced in a sustainable manner.

The Opposition is raising this concern in view of the following facts, the PN said in a statement.

Shift towards indirect taxation

Revenue from income tax during the first quarter of 2015 went down by €12.4 million. On the other hand revenue from indirect taxation went up by €28 million, in part because of the additional taxes introduced by government in the last budget and also because of government's decision not to lower the price of petrol and diesel despite the drop in the international price of oil. Government should ensure that this shift is not causing undue burden on the lower income earners of society who might end up paying more taxes despite lower income.

Increase in expenditure on wages – decrease in expenditure on medicines

Expenditure on government salaries and wages increased by €10 million during the first quarter largely due to the increase in government head count by over 2000 persons. Conversely expenditure on social security and medicines went down by €9.4 million and €3 million respectively. While favouring any initiative aimed at curbing abuse of the welfare system, the Opposition calls on government to ensure that these reductions are not placing undue hardship on the most vulnerable members of our society. The Opposition hopes that that the savings made through curbing of abuse is not being channelled towards non-productive salaries and jobs in the public sector. If this is the case then government is substituting private abuse with public abuse.

Increased outlay for government property

The Opposition notes that government spend on acquisition of property went up by €7.1 million. Government should explain whether this increase in expenditure includes the €4.2 million spent on buying out the operators of Cafe Premier. It would be sad and ironic that while government decreased the spend on medicinals it found money to bail out a commercial operator in a deal that was slammed by the Auditor General as an example of poor governance.

Increase in National Debt

The National Debt went up by an additional €130 million when compared to the same period last year. Despite its promise to reduce the national debt, this administration is pushing up national debt month after month. Government seems to be unfazed by this increase due to a better debt to GDP ratio. This lack of concern on the part of government is not shared by the Opposition which sees this increase in debt as an added weight which is not being counter balanced by improvements in infrastructure.

Government should explain these issues and assure the public that the improvement seen in government's finances is a sustainable one that is being driven by real improvements in the country's competitiveness and economic standing and not by one-off gains and unproductive government expenditure.