Although the Nationalist government has expressed pride in the fact that recently-published financial statistics show a 14 per cent reduction in the country’s deficit, the same statistics also show that the government is not reaching its aims in a sustainable manner, Labour’s main spokesman for finance and economic affairs Charles Mangion said in a statement yesterday.

The National Statistics Office noted that the calculation of the deficit is based on cash revenue and expenses, rather than on what is acceptable internationally, that is on the basis of accruals. This can easily create a fictitious picture that does not reflect the government’s actual financial situation, said Dr Mangion, adding that the Auditor-General had remarked that the government’s financial report did not reflect the real financial situation in all its aspects.

Dr Mangion pointed out that the government’s major income, as included in the financial report – ie through income tax, VAT and social contributions, was based on arrears collected during the first six months of the year.

While it is a good thing that arrears are collected, Dr Mangion expressed concern that additional income does not result from economic growth in the country’s productive economic sectors.

The deputy leader of the Malta Labour Party said that during the first six months of the year, the government had saved more than Lm10 million in capital productive expenses. This means that it had reduced its expenditure in essential capital sectors like tourism, factory construction, fishing and agriculture, all of which are facing serious problems, said Dr Mangion.

He added that the reduction in the national debt was attributable to the Lm74 million that the government earned from the sale of its Maltacom shares and that, despite the fact that the reduction in debt was only Lm15 million, during the first six months of the year the Nationalist government had still needed to revert to loans and debts amounting to Lm60 million.

Dr Mangion said that the main issue at this point is: “How will the national debt be reduced when there are no more national assets to sell?”

Moreover, interest expenditure increased by Lm2 million during the first six months of the year, in other words Lm200 per person over a year, he said.

The government’s financial statistics also showed that, in the past year, income from the Central Bank had continued to fall.

This primarily reflects the imbalance in the current account as a result of the increasing difference between exportation and importation of services and products, and this in turn is due to the fact that real and sustainable economic growth is non-existent, Dr Mangion insisted.

He said the Labour Party believes that government needs to wake up from its deep slumber and stop trying to fool people with senseless propaganda.

Dr Mangion concluded that the government needs to seriously address the problems faced by Maltese and Gozitan families, including the burden of the rising cost of living, a lack of employment opportunities and a threat to jobs.