Important aims that the government had set itself in the financial sector were not being achieved, as shown by official statistics on the government’s financial situation for the January-April period this year, MLP deputy leader Charles Mangion said yesterday.

These aims had been set in the budget for this year so they were closely linked with the public finances’ convergence and sustainability plan. The differences in the aims that were set and the actual situation also confirmed that the government was in a panic to create a feel-good factor now that the election was approaching.

The first aim which had failed completely lay in recurrent expenditure, Dr Mangion said. The budget for this year had estimated that this expenditure would go up only by a little more than Lm7 million over last year. But during the mere first four months this year, recurrent expenditure had risen by Lm14.5 million – in the first four months, the government had overspent by more than double what it should have in the full year.

While the government had promised to cut the costs of the many authorities and bodies it had, so much so that Minister Austin Gatt’s estimates projected Lm8 million less in expenditure on them, the situation was that that expenditure in the first four months this year had risen by Lm2.6 million.

This trend in government expenditure belied the government’s boasts about financial sustainability and confirmed that the budget estimates’ aims, announced only some months ago, were not being achieved. The government had cut its capital expenditure for the first four months by almost Lm4 million so the rise in recurrent expenditure confirmed the government’s incompetence in the country’s financial management.

Dr Mangion said that in the final year before the election, the Nationalist government was repeating the financial tactics it had employed before, presenting estimates which showed consolidation, while in fact the situation was deteriorating. This had happened in 1996 and 2003 and was being repeated this year, as the trend for the first four months showed.

The government was also sliding back on its second aim, that of obtaining the grants due to Malta from the European Union. The government had projected a grants total for this year of over Lm6 million each month, taking the total to over Lm73 million for the whole year. But for the first four months this year, the grants total had fallen by Lm14 million when compared to last year. This confirmed that the Nationalist government had failed to prepare the documentation needed for these funds to be received in time. But at the same time, the country was regularly paying the contributions it had to make, so the losses were aggravated by this incompetence.

This was administrative irresponsibility and created doubts both about the financial estimates announced by the government for this year, as well as the future sustainability of the country’s financial situation.

It was also worth noting that in spite of the sale of Maltacom for Lm94 million, the national debt had gone down by only Lm40 million and today stood at a high of over Lm1,300 million. One needed to ask if the government had received the entire amount of the sale price for Maltacom’s shares, because this amount was due to be channelled entirely to reduce the debt.

Apart from this, Dr Mangion argued, the government was not going to raise loans, according to the estimates for last year. Indeed it expected to end with a favourable balance. So one expected an explanation as to why the debt had not been cut by the entire amount raised by the Maltacom sale. This sale was the last of the nation’s assets, whose aim was to cut the debt burden. But instead, that burden was still there and this was reflected in the fact that the interests on it were an average of Lm77 million a year, equivalent almost to the total expenditure on the health sector.

The figures for the first four months this year gave the lie to the government’s claims about the sustainability of its finances.

All caution on recurrent expenditure was being thrown to the wind and the government was failing to rake in the European Union’s grants because it was not doing its work.

This situation was prevailing in spite of the heavier taxation burden over the past four years, representing the highest increase in Europe, and which for Maltese and Gozitan families meant an increase of about Lm50 million each year.

This had been reflected in families’ weakened purchasing power which, with the cost of living, translated into a drop in the quality of life.

The more time passed, Dr Mangion said, the more obvious was the need for transparency, accountability and efficiency in public administration.

This was being felt more from what had become obvious about the situation over the first four months of this year in the finances sector.