[WATCH] Labour toasts first balanced budget in 35 years with €8.9 million surplus

Prime Minister and finance minister Edward Scicluna address press as consolidated fund registers surplus of €8.9 million

paul_cocks
Paul Cocks
30 March 2017, 11:55am
Prime Minister Joseph Muscat (Photo: James Bianchi/MediaToday)
Prime Minister Joseph Muscat (Photo: James Bianchi/MediaToday)
Prime Minister Joseph Muscat has toasted news of latest National Statistics Office data showing Malta has achieved its first balanced budget in 35 years.

In 2016, the Consolidated Fund registered a surplus of €8.9 million.

Compared to 2015, recurrent revenue registered an increase of €172.2 million whereas total expenditure went down by €72.5 million. This resulted in a positive change in the Consolidated Fund by €244.7 million.

In 2016, recurrent revenue was recorded at €3,807.0 million, up from €3,634.8 million last year. The comparative increase of 4.7 per cent was primarily the result of higher income tax and social security which increased by €143.6 million and €64.8 million respectively.

Two years ahead of the government’s plans, Muscat hailed the news as “Maltese economic miracle.”

"I am feeling very proud today of the team led by deputy prime minister Louis Grech and (finance minister) Edward Scicluna, because we have recorded the country's first surplus in an entire generation," he said. "This is Maltese economic miracle." 

Muscat, who was addressing a press conference at Castille, said that the government had reached a surplus without having to resort to any austerity measures. 

He said it would be easy for the government to embark on a spending spree, but that would send the wrong message. 

"Our priority is to ensure this will not be a one-off, but a trend which we need to sustain over the coming years," he said. 

Muscat insisted the government had the credibility to sustain the trend, introducing more free services, lowering taxes and investing in social welfare. 

Muscat said that the NSO's calculations, leading to a budget surplus, do not include 70% of the money generated by the IIP scheme, which have been set apart for social initiatives, such as a possible development bank. 

"These are not statistics, these are tangible differences and improvements in the quality of life of all Maltese," Muscat said. 

Photo: James Bianchi/MediaToday
Photo: James Bianchi/MediaToday
However, major decreases were recorded in proceeds from grants (€73.8 million),

Recurrent expenditure stood at €3,264.3 million from €3,056.8 million last year. The major contributor to this increase was programmes and initiatives with a rise of €92.1 million. The main developments in this category involved higher social security benefits (€32.3 million), a rise in social state contribution (of €21.8 million which also features as revenue), health concession agreements (€16.0 million), added outlays due to EU Presidency 2017 (€15.5 million), contribution to Planning Authority (€9.1 million), Public Service Obligations (€5.8 million), private residential care (€4.5 million), Church schools (€2.8 million) and solid waste management (€2.6 million).

On the other hand, lower outlays for EU Own Resources were recorded (€27.1 million). Increases were also registered in contributions to government entities (€60.1 million), personal emoluments (€39.6 million) and operational and maintenance expenses (€15.7 million).

The interest component of the public debt servicing costs stood at €223.5 million, down from €232.3 million last year.

Government’s capital expenditure witnessed a decline of €271.2 million, and was recorded at €310.3 million. This was mainly the result of lower spending on EU funded projects due to the closure for the payments under the EU funding programme 2007-2013.

At the end of 2016, Central Government Debt stood at €5,474.9 million, up by €140.2 million over the corresponding month last year. This was the result of higher Malta Government Stocks and Treasury Bills, which added €180.9 million and €32.0 million respectively.

On the other hand, Domestic Loans with Commercial Banks and Foreign Loans went down by €56.4 million and €10.4 million respectively.

European Commission Vice-President welcomes news of Malta's 2016 budget surplus

Malta's economic growth, record unemployment and the 2016 budget surplus were clear indications that the Maltese government was delivering on its commitments, the Vice-President of the European Commission, Valdis Dombrovskis, said on Thursday. 

The commissioner, who was addressing a press conference in Valletta with Malta's finance minister Edward Scicluna, said he had been particularly pleased with news that Malta had recorded a budget surplus in 2016, when it had forecast a deficit for another two years. 

He said he also appreciated the hard work being carried out by the Maltese presidency of the Council of the European Union, particularly with regards to secularisation, loan payments and venture capital. 

"We worked very closely, particularly because of the presidency, and today we continued discussing our own economy and structural reforms to meet the country's targets," Scicluna said. 

Scicluna said the two had also discussed the progress report on Malta's presidency, which was managing to do good progress on its targets. 

He said that Malta would be able to look back to its six-month presidency with pride and a sense of accomplishment. 

They also discussed next week's informal Ecofin meeting, which will include central bank governors. 

European Commission welcomes surplus announcement

European Commission vice-president Vladis Dombrovskis welcomed the announcement as an indication that the Maltese government was delivering on its commitments.

The commissioner, who was addressing a press conference in Valletta with Malta's finance minister Edward Scicluna, said he had been particularly pleased with news that Malta had recorded a budget surplus in 2016, when it had forecast a deficit for another two years. 

He said he also appreciated the hard work being carried out by the Maltese presidency of the Council of the European Union, particularly with regards to secularisation, loan payments and venture capital. 

"We worked very closely, particularly because of the presidency, and today we continued discussing our own economy and structural reforms to meet the country's targets," Scicluna said. 

He said the two had also discussed the progress report on Malta's presidency, which was managing to do good progress on its targets. 

He said that Malta would be able to look back to its six-month presidency with pride and a sense of accomplishment. 

They also discussed next week's informal Ecofin meeting, which will include central bank governors. 

paul_cocks
Paul Cocks joined MaltaToday after having spent years working in newspapers with The Times...