Expenditure

Between January and August, total government expenditure increased by €150.9 million and reached €2.553 billion. The increase is the result of an increase in recurrent expenditure, in part offset by lower interest on public debt and capital expenditure. Indeed, during the first eight months of 2017, recurrent expenditure amounted to €2,221.6 million, an increase of €157.9 million. Over the same period, outlays in respect of interest on public debt decreased by €5.3 million to €144.4 million, while capital expenditure decreased by €1.6 million to €186.7 million.

Recurrent expenditure

Recurrent expenditure is classified under four categories: Personal Emoluments, Operational and Maintenance Expenditure, Programmes and Initiatives and Contributions to Government Entities.

Programmes and Initiatives comprises expenditure and social transfer payments made in respect of ad hoc programmes run by the government, as well as subsidies, payments and grants for the provision of services to citizens and to charitable and private institutions but excludes the operational costs of government departments. It also includes payments of own resources as contribution to the EU budget.

During the period under review, this category of expenditure increased by €133.7 million to €1,367.9 million, mainly on account of higher outlays towards social security benefits, in particular retirement pensions and widows’ pensions. Additional outlays towards social security benefits also reflect seasonal conditions in the timing of payments due. Higher outlays were also recorded in respect of Health Concession Agreements, as well as EU own resources and the Presidency of the Council of the EU.

However, lower outlays were recorded for the provision of spare capacity and due to the nonrecurrence of international conventions, in particular that of CHOGM 2015.

Contributions towards Government Entities include the funding of government entities, parastatals, corporations and authorities. Outlays towards this category of expenditure amounted to €241.4 million during the period under review, thus representing a marginal increase of €2 million compared with last year.

State salaries

Personal Emoluments include all salaries and wages paid to elected officials and civil servants, as well as any bonuses and supplements paid to employees in excess of standard remunerations including any allowances and overtime payments. This category of expenditure increased by €25.6 million to €501.7 million when compared to the corresponding period of the previous year. Higher personal emoluments were mainly recorded in respect of the health and education sectors.

During the first eight months of 2017, Operational and Maintenance expenditure which includes payments for utilities, contractual services, materials and supplies, transport and rent, decreased by €3.5 million over the same period in 2016, to €110.6 million.

Higher outlays in respect of the elderly and community care were more than offset by lower operational and maintenance expenditure by the Ministry for Health.

Social Security Benefits

At 28.2 per cent of the government’s total recurrent expenditure, social security benefits make up the largest share of government recurrent expenditure. Around 81 per cent of the social security benefits are contributory benefits, mainly retirement pensions, while the rest of the 19 per cent make up the noncontributory benefits, mainly social assistance and children’s allowance.

During the first eight months of 2017, welfare payments totalled €625.9 million, as contributory benefits increased by €33.4 million mainly reflecting increases in outlays towards retirement pensions. Non-contributory benefits, meanwhile, increased marginally by €1.2 million.