[WATCH] Budget overrun by €158 million 'only', third lowest since 2000

Edward Scicluna Says Budget Overun Third Lowest Since 2000

Finance minister Edward Scicluna has strongly dismissed the Opposition's claims that overruns of the 2016 Budget mean that he has lost control over the public finances.

Photo by James Bianchi/MediaToday

Addressing a press conference, Scicluna said that the 2016 Budget was overrun by €158 million, and not by €250 million as had been reported.

"The least I would have expected from the Opposition is for them to read the report on supplementary expenditure," he said.

"It says in the second page that the over-expenditure was of €158 million, and I have no idea where the €250 million figure came from. It’s completely amateurish."

He also dismissed concerns that the overruns would in any way impact the government's plans to reduce the national deficit to 0.7% of GDP by the end of the year. 

Scicluna said that all requests by ministries to increase the budget allocations were vetted by himself and a finance ministry committee and that many requests were turned down.

Photo by James Bianchi/MediaToday

Indeed, at 3.2% higher than the original allocation, the percentage by which the supplementary budget exceeded the original one was the third lowest registered since 2000.

The most it was exceeded by was by 16.1% in 2008.

"The Opposition must truly be double-faced to claim that the figure is shocking when they themselves have presented much higher supplementary estimates over the years," Scicluna said.

"The PN have a former finance minister [Tonio Fenech] in their parliamentary group but he has been conspicuous by his absence, because as a former finance minister, he could have explained what I just said to his colleagues."

Earlier

The Nationalist Party has demanded the government give clear answers as to why it overran its Budget for 2016 by a whopping €250 million.

Addressing a press conference, PN deputy leader Mario de Marco took finance minister Edward Scicluna to task for not keeping public expenditure under control and questioned what impact these overruns will have on the national debt and deficit.

He also questioned why the National Statistics Office recently revised its GDP growth forecasts for 2014 and 2015, and called for these issues to be debated at Parliament's Public Accounts Committee.

The National Audit Office recently found that the government overrun its budget by a whopping €250 million, including significant increases in public money spent on travel, professional services and contractual services.

The travel vote for the Office of the Prime Minister exploded by 350% - from €640,000 to €2.2 million. Information services at the OPM increased from the allocated €520,000 to €1 million, while money allocated for the acquisition of property for public purposes increased from €7.5 million to €9.5 million. 

Contractual services at the tourism ministry increased from €140,000 to €460,000, while professional services from €9,000 to €1 million, an eye-watering 11,211% increase. The original allocation for the Malta Tourism Services was increased from €40 million to €56 million, while the vote for contractual services at the economy ministry increased from €107,000 to €2.5 million.

"The tourism minister [Edward Zammit Lewis] could have had his reasons for increasing his expenditure, but he should explain and justify this discrepancy.

"The Budget system is clearly not functioning as it should be, either because the various ministers had requested less money than they had needed or because they had entered into financial commitments that weren't approved in the Budget. Whatever the case, the conclusion is that the finance minister isn't keeping ministry expenditure under control."

He also warned that these figures on the government's supplementary estimates, released in December, did not tally with figures released by the National Statistics Office a few weeks earlier.

Indeed, the NSO statistics indicated that 90% of the government's 2016 budgeted revenue, 90% of its budgeted recurrent expenditure and 70% of its budgeted capital expenditure was on track as of the end of November.

"I will not speculate as to what led to this discrepancy, but there is clearly something wrong," he said. "There was either miscommunication between the NSO and the authorities, no communication at all, or something else..."

De Marco also questioned why the NSO recently revised its GDP growth forecasts for 2014 from 3.4% to 8.4% and for 2015 from 6.2% to 7.5%. He recounted how Gordon Cordina had in 2007 resigned as head of the NSO in the wake of criticism by the Labour Opposition over marginal statistical revisions.

“If Labour was so worried about the marginal revision back then, how will the Labour government react to such a significant revision?”

Shadow economy minister Claudio Grech warned that these excesses in public expenditure aren’t being used on capital projects, and that indeed capital expenditure has dipped steadily throughout Labour’s tenure in government.

“An economy can only continue growing if the government continuously invests in the country’s infrastructure,” he said.

Opposition MP Kristy Debono similarly warned that the public will not reap the fruit of the €250 excess in public expenditure.

“Taxpayers would rather their money was spent to improve social services, build more social housing, improve public transport and subsidise all medication for elderly citizens,” she said.