Government finances: Increase in expenditure more than double that from revenue

Malta Independent Friday, 25 April 2014, 11:33 Last update: about 12 years ago

In the ?rst quarter, the de?cit of the Government’s Consolidated Fund amounted to €225.6 million.

During the ?rst three months this year, recurrent revenue registered an increase of €41.3 million while expenditure went up by €99.4 million when compared to the corresponding period last year, widening the shortfall between recurrent revenue and total expenditure by €58.1 million.

During the period under review, recurrent revenue was recorded at €637.8 million, up by 6.9 per cent over last year. The main contributors to this increase were Income Tax (€34.7 million), Value Added Tax (€24.3 million) and Social Security (€10.6 million). Conversely, Grants registered a decline of €31.0 million.

Compared to January-March last year, higher spending was registered in recurrent expenditure and interest payments, which was partially offset by lower outlays on capital projects.

Recurrent expenditure increased by €104.4 million, mainly as a result of higher spending on Programmes and Initiatives (€57.7 million) and Contributions to Government Entities (€23.7 million). The major increases registered in the Programmes and Initiatives category were recorded in medicines and surgical materials (€13.7 million), EU Own Resources (€9.0 million), assistance to help the elderly live independently (€7.6 million), the feed-in tariff (€5.0 million) and social security bene? ts (€4.5 million). Moreover, Operational and Maintenance Expenditure and Personal Emoluments went up by €11.7 million and €11.2 million respectively.

The interest component of the public debt servicing costs for the period under review rose to €53.8 million from €51.4 million last year.

Expenditure on Government’s capital projects amounted to €96.7 million. The reduction of €7.4 million over the corresponding period last year was mainly the result of a lower equity injection to the national air carrier (€24.0 million), which was partially outweighed by a higher contribution towards the treasury clearance fund (€14.7 million).

At the end of March, Central Government debt stood at €5,235.9 million, up by €291.2 million over the corresponding period last year. This was the result of higher long-term and short-term borrowing, which added €202.3 million and €78.6 million respectively. On the other hand, foreign borrowing went down by €11.0 million. As a result of consolidation, lower holdings by government funds in MGSs brought about an increase in debt of €17.1 million. The euro coins issued in the name of the Maltese Treasury went up by €4.2 million when compared to the coin stock as at the end of March 2013, and totalled €55.0 million.