Parliament will be discussing next year’s budget ahead of schedule, so that the debate will be out of the way by the time the Commonwealth Prime Ministers converge on Malta for their meeting scheduled in November.

It is earnestly hoped that the budget debate will not be precipitous as a result. Government finances have been precarious for some time and it does not seem that the prevailing situation is improving.

This time round, the budget will be clinically assessed in Brussels by the hawks of the European Commission, who will take its measure by the yardstick of the Convergence Plan drawn up a year ago or so. For this reason alone, this debate has to be thorough, and parliamentary scrutiny has to be exacting. By this I mean that the Brussels examination will focus on the actual government performance during 2004 (vis-à-vis the Convergence Plan) more than on airy-fairy projections for 2005.

From a detached Maltese point of view, it would be wise to conduct the impending debate in line with Dostoevsky’s dictum that “realists do not fear the results of their study”.

Latest official data

The National Statistics Office has just released the latest official data relating to Government Finance for the period January–August of this year.

Recurrent revenue during the first eight months of 2005 totalled Lm530 million – representing an increase of Lm61.5 million over the comparative period of 2004.

The government needed much more than this substantial windfall to keep going. Total expenditure between January and August of this year ran up to Lm62l million, which is Lm40 million (or 6.8 per cent) in excess of total expenditure registered during the comparative 2004 period, when total expenditure reached Lm582 million.

The Lm6l.5 million bonanza extracted from the hard pressed tax-paying community, did not assuage the appetite of a voracious administration.

It borrowed a further Lm59.5 million, or an additional 4.4 per cent on the Lm1, 35l million outstanding at the end of August 2004. And the National Debt reached yet another peak at Lml,410.6 million

Debt servicing costs

This is the key factor that hangs like a millstone round Malta’s neck. It takes close to Lm100 million per annum to service this debt bill. It has to come from taxation. It practically amounts to Malta’s structural deficit – it is structural because it occurs every year, unless and until it is paid up.

Until this debt is wiped out, millions of liri that would have been otherwise available for productive use, or to enhance the social services fabric, will be hypothecated for its servicing.

It is in the light of this that one questions capricious expenditure, such as that incurred to buy prime property in Brussels, or to set up additional government entities run by officials who are paid fantastic salaries, well in excess of those paid to the topmost civil servants or Ministers.

Control of the purse-strings

It is also in this light, that Parliament should come round to

consider more efficient and stringent scrutiny and control of public expenditure. It is not enough for Parliament to exercise control of the purse-strings by voting the annual budget. Ways and means clearly have to be found for Parliament to make sure that (a) public funds are spent in the manner authorized by the House and (b) that Parliament could intervene, autonomously and on its own authority, at the first firm indication of abuse, dereliction and /or corrupt practice.

The bureaucrats in Brussels would be interested in the end-results rather than in the mechanics. But the Malta Parliament would never be in a position to deliver the desired results, unless it made sure that it was in control of the mechanics.

At the heart of the ailment, what has afflicted Malta during the past several years, is lack of effective control of the purse-strings.

Our safety is not in blindness, but in facing the pitfalls that set us back. I would add that a storm is no less threatening because blind men do not see the gathering clouds.

jgv@onvol,net