The Malta Independent 25 May 2019, Saturday

Third annual surplus in a row would have been registered even without IIP income - Muscat

Albert Galea Tuesday, 23 April 2019, 15:01 Last update: about 1 month ago

Malta has registered a surplus for the third year running, a surplus which would still have been registered if the money gained from the country’s Individual Investor Programme, or rather; passport selling scheme, was removed from the equation entirely, Prime Minister Joseph Muscat and Finance Minister Edward Scicluna said in a press conference on Tuesday.

Statistics issued on Tuesday morning both by the National Statistics Office and by Eurostat show that Malta registered a surplus of €250.8 million in 2018, the third year in a row that the country has registered a surplus.

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Speaking at Castille on Tuesday, Scicluna said that while income from the IIP helps amplify the surplus, the surplus is not solely reliant on it. He later said that the IIP had contributed €190 milllion, and that without it, the government would still register a surplus of €60 million.

Muscat reiterated this point and reminded that a substantial part of the income from the IIP – some 70% of it – goes to the NDSF for social projects which are independent from the government.

Scicluna meanwhile took aim at those who had cited figures released last month which showed a €70.2 million deficit in the consolidated fund as evidence that the government had gone back to having a deficit, saying that there is only one dataset which could indicate whether government has a deficit or a surplus; the one issued on Tuesday.

Another notable statistic is that the government debt-to-GDP ratio had fallen to 46%, well below the 70% that it had been in 2012 and down from the 50.2% level it was in 2017.  This is also well below the targets established by the EU through the Maastricht Treaty, which stand at 60%.

Muscat noted that a crucial point that these results show is that the government is looking at the management of the economy in a holistic manner and knowing that wealth creates wealth, rather than as an accounting exercise.

The easiest thing that the government could have done to register a surplus, Muscat said, was to simply spend less money and retain the same level of income.  The government, the Prime Minister said, had instead gone for a philosophy wherein taking decisions and embarking on programmes that will create opportunities but may cost a substantial amount of money is not frowned upon.

He cited measures such as the government’s provision of free childcare as an example of this, saying that while this does cost the government a certain amount of money, that money is recouped in the opportunities that such a measure gives to women who want to join the workforce and hence create more wealth themselves.

The word “surplus” means a lot for everyone in the country, Muscat said, and it is through this that the country will continue to see improvements in matters such as pensions, infrastructure, and work conditions. 

Muscat noted that the 2018 surplus is smaller than that of 2017.  He said that back then, certain criticism had been levelled against the government, with some saying that it could have spent more money on certain areas. 

The Prime Minister added that another crucial piece of evidence to take note of was the country’s sustainability.  He said that whilst the government had inherited a 3% deficit – which equated to €150 million – it now was registering a 2% surplus – which equates to €250 million.  The difference in the percentage ratios shows how much the country has progressed, in that in 2012 €150 million was considered to be 3%, while now €250 million is considered to be 2%.  

“A surplus does not come alone; it comes from leadership with vision and from the capability to take decisions that not everyone will necessarily agree with”, Muscat said.  It is these sometimes controversial decisions however that have to be taken so to make sure that Malta’s economic performance continue to be sustained.


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