Data shows unsustainable spending patterns, PN says

Government finance data released by the National Statistics Office point to further increases in recurrent expenditure and a substantial drop in capital expenditure, according to the Nationalist Party.

“The drop in capital expenditure of €13 million is, in fact, the major contributor to the lower consolidated fund deficit registered in January 2017,” Shadow Finance Minister Mario de Marco said yesterday

“A comparison between government expenditure data for January 2017 and that of January 2015 points to some worrying and unsustainable trends. Capital expenditure went down from €30 million to €10 million, representing a 68% drop. Recurrent expenditure during the same period went up by €29 million or 13%. Public service wages increased by €5 million (9%), Operation and Maintenance expenditure by a further €5 million (35%) and Interest expenditure by €3 million (23%).”

Total revenue in January 2017 increased by €51 million when compared to the corresponding period of 2016. However, nearly half of this increase was due to an increase in receivable grants amounting to €22 million, Dr de Marco said.

“Total government debt in January 2017 increased by €61 million when compared to the previous year and €301 million when compared to the January 2015.”

The data released points to certain unsustainable spending patterns, Dr de Marco argued: “Capital expenditure, essential to ensure that our economy remains competitive and that our infrastructure is capable of meeting present and future demands, is decreasing year on year.

“On the other hand, recurrent expenditure is shooting up as the government continues its spending spree, not least through the creation of hundreds of positions of trust across the public sector — a fact that was noted by the International Monetary Fund in their recent report on Malta’s economy. While government is finding solace in ratios, the undeniable fact remains that government debt in absolute terms has shot up over the past four years. This debt will have to be carried by future generations.”