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Government ignored EC warning, and had to resort to ‘austerity cuts’ - Labour

Labour says government cutting €40 million in spending cut to freeze public sector jobs, salaries and programmes.

miriam
Miriam Dalli
12 January 2012, 12:00am
Labour said Budget 2012 ignored the EC warnings on deficit reduction.
Labour said Budget 2012 ignored the EC warnings on deficit reduction.
Labour's spokesperson for finance Karmenu Vella said the European Commission had proved the Opposition right when it ordered a deficit cut of 0.59% of gross domestic product, or €40 million in government spending.

The Commission informed Malta on 11 November, three days before the Budget, that the government's deficit figures were not tallying with its own estimates for the deficit and economic growth.

Lawrence Gonzi yesterday said the EC's acceptance of his spending cuts was a "certificate" acknowledging that his government was on the right path to deficit reduction.

But Karmenu Vella today said the Opposition was right all along when it said Gonzi's budget estimates had been over-optimistic.

"This was supposed to be a budget of financial consolidation and economic growth. The government projected growth at 2.3% when the EC said this was expected to be 1.3%. Government projected the deficit going down to 3% when the EC said this was going to be 3.5%."

In its forecast for Malta and four other member states, the EC warned the countries had to speed up their deficit cutting measures and that Malta's deficit was expected to widen to 3.5% of gross domestic product in 2012 and 3.6% in 2013.

"Government was deceitful with its estimates, and now it has to explain where the cuts in recruitment and maintenance will take place," Vella said. "We want to know where the cuts in recruitment and overtime will be, when government is bound by a collective agreement this year."

The 0.59% cut in government spending is expected to result in restraints in recruitment (0.1% of GDP), overtime (0.04% of GDP), operational and maintenance expenditure (0.07% of GDP), programmes and initiatives (0.21% of GDP) and government entities (0.17% of GDP).

Vella said €14.2 million will be cut from government programmes, while Labour MEP Edward Scicluna says government will have to wipe off as many as 500 jobs in a recruitment freeze and stop 400,000 hours in overtime.

"This is a €3 billion budget, and yet the €40 million cuts were not done there and then," Scicluna said. "And now the Prime Minister is going for cuts in public sector salaries, not cuts in his expenditure on the parliament building. Had the government heeded the Commission's warning, this would not have happened."

"Government is always hiding the real state of the economy," Karmenu Vella said, While it is carrying out €40 million in spending cuts, the expenditure of €80 million on the new parliament building is being hidden from the national accounts," Vella said.

miriam
Miriam Dalli joined MaltaToday.com.mt in 2010 and was assistant editor fr...
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Raymond Sant
Qed taraw kemm għadna sovrani bis-sħubija fl-UE? Id-dittaturi ta' Brussel jordnaw u l-Gvern MAlti jkollu jobdi. Dik indipendenza u sovranità!!!!!
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Stephen Xuereb
The dishonesty of the PN Govt knows no bounds. The EU did not accept the 2012 budget and obliged the Govt to amend it by downsizing expenditure. The bulshitters in Govt are trying to fool us into beleiving that by having had to obey the EU correction ghamlu xi bravura kbira. It is like a student having given in an essay, told that it was not acceptable as is, and was made to correct it. The student corrects it as he was told and then goes out bragging on how pleased the examiner is with his performance!!!!!!. Sopra corna e bastonate, Tonio Fenech wants us to beleive this. U mhux hekk........
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Lino Micallef
Is-serq li sar u badlu il-kaxxa ta Malta jista jigi lura faccli , Hemm il Public accounts commitee, u l-awditur generali ghandu kollox pruvat is-serq, wiehed minnhom hu Austin Gatt u jekk jghgbok huwa wiehed mil public accounts commitee u kif tridu jivvota favur l-iskandli allura Gvern gdid laburista hija faccli jiftah ir-rapporti ta awditur generali u jimxi min hemm u min seraq ghandu jrodd lura li seraq. Din hi prova cara ghax hlief lawditur generali wera kemmm kien hemm serq, il habs lanqas jesa ghal dawn il hallilien.
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stephanie cilia
Ghal-gvern ta' Gonzi budget ifisser zieda sostanzjali fuq dak li jkun ipprogetta Dipartiment fid-dhul ghas-sena ta' wara u fl-istess hin tnaqqis kbir fuq li jkun ipproggetta fl-infieq l-istess Dipartiment. Ezempju jekk Dipartiment jipproggetta li jkun se jdahhal 10m euro u jonfoq 5m euro ghas-sena ta' l-estimi, il=ministeru tal finanzi jibdel dawn il-figuri billi jippublika li dan id-dipartiment ghandu jdahhal 15m euro u jonfoq 4m euro. B'hekk ikun qed jonfoh fuq li jonfoh il-figuri. Naf sew x'qed nghid.
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mark bonavia
Veru PRIM ATTUR ghnadna jmexxi lill-pajjizna mhux prim ministru ! Ghax il-Kummissjoni Ewropeja gibditlu widnejh u qaltlu li l-figuri tal-budget ma kienux kredibbli, u gieghlitu jnaqas 40 miljun ewro mill li spiza- li ghad ma nafux min u kif se jintlaqtu n-nies - hareg il-bierah jiftahar li l-UE tghatu certifikat sabih !! Mela ghax gie mgieghel inaqqas 40 miljun ewro - jigifieri l-figuri tal-budget kienu zbaljati - ghal Gonzi dan certifikat tajjeb ! Daqstant ghandna , mhux biss ministri inkompetenti izda anke l-prim ministru !Nahseb li mhux Franco Debono qed jitlef mohhu izda min qed jahseb hekk !!