Income Tax and other revenues rise – so does the national debt

Malta Independent Saturday, 28 July 2007, 00:00 Last update: about 20 years ago

Data from the Consolidated Fund as at the end of June 2007 show that the shortfall between recurrent revenue and total expenditure for the first half of this year amounted to Lm75.7 million, Lm1.6 million higher than the shortfall of Lm74 million reported for the first six months of 2006, according to National Statistics Office figures. An increase of Lm12.2 million in total expenditure was in part offset by an increase of Lm10.6 million in recurrent revenue.

During the first six months of the year, revenue from income tax increased by Lm15.1 million. Concurrently, revenue from social security contributions and from value added tax increased by Lm5.9 million and by Lm3.3 million respectively. On the other hand, revenue from grants declined from Lm24.1 million last year to Lm2.9 million in the period under review.

Recurrent expenditure amounted to Lm390.8 million, an increase of Lm18.2 million when compared to the same period last year.

This increase was essentially brought about by a rise of Lm6.8 million in social security benefits, by higher outlays (+Lm2.8 million) on medicines and surgical materials by the Ministry of Health, as well as by increases (+Lm2.2 million), due to the government’s energy support measures, under the Ministry for the Family and

Social Solidarity.

Lower interest payments on the government’s long-term borrowing resulted in a decline in the interest component of the public debt servicing costs for the January-June period.

Total interest payments for the six months under review amounted to Lm38.4 million.

Capital expenditure for the first six months of the year amounted to Lm46.8 million, registering a decline of Lm5.2 million when compared to the capital expenditure of Lm52 million for the same period in 2006. Lower capital outlays by the Ministry of Finance (–Lm6.6 million), and by the Ministry for Tourism and Culture (–Lm1 million) were in part offset by higher expenditures under the Ministry for Rural Affairs and the Environment (+Lm2.1 million).

New loans taken up by the government for the first six months of the year amounted to Lm28.9 million.

The central government debt outstanding at the end of June 2007 amounted to Lm1,380.5 million, an increase of Lm22.2 million from June 2006. When compared to 12 months ago, government stocks and foreign borrowing declined by Lm42.4 million and Lm10.1 million respectively, while outstanding Treasury bills increased by Lm75.2 million.