In a statement issued in reply to another by Labour Deputy Leader Charles Mangion, Dr Fenech said the government was committed to reducing the country’s deficit. In fact, he said, during the first five months this year, the government’s income and expenditure tallied with the predictions made during the budget.

Contrary to what Dr Mangion said, the government is not only addressing the problem by controlling its expenditure, but was doing so without ignoring the country’s economic and social needs, he said.

According to this year’s budget, while the income is expected to increase by Lm103 million over last year’s figure, the government’s expenditure is expected to increase from Lm741 million to Lm811 million – an increase of Lm70 million. This means that the fiscal deficit at the end of 2003 of Lm107 million is projected to decrease to Lm94 million.

Dr Fenech continued to explain that during the first five months of this year, the government spent two per cent less than the amount the government had spent in the same five months last year. This meant, he said, that if the government continued to spend similar amounts to that spent last year, the expenditure in the first five months this year would have amounted to Lm12 million more.

Contrary to what Dr Mangion is claiming, he said, the projected decrease in expenditure for this year amounts to Lm6.7 million – Lm1.7 million from government entities, Lm2 million from loan interest rates and Lm3 on other recurrent expenditure.

He said the government increased the budget for medicines and surgeries by Lm4.5 million, Lm1.3 million more for infrastructure projects, Lm800,000 for education and a total of Lm268,000 extra for other projects in Gozo.

On the Cabinet decision to purchase property in Brussels for a Maltese embassy, Dr Fenech said Malta saved Lm1.5 million by buying it rather than renting it.