Tonio Fenech insists €40 million budget cuts are only precautionary

Finance Minister says budget cuts will only be implemented if deficit-reduction target is not met by middle of the year.

Tonio Fenech said his €40 million budgetary cuts have not been imposed by the European Commission.
Tonio Fenech said his €40 million budgetary cuts have not been imposed by the European Commission.

Finance Minister Tonio Fenech said the government will wait until June 2012 to implement €40 million in spending cuts, if it sees it necessary to implement.

Fenech announced he will implement the cuts if targets to reduce the deficit by the middle of the year is not reached, however government departments will still be expected to propose expenditure cuts in the coming weeks.

"The cuts were not imposed by the European Commission, which gave the Budget the thumbs-up, but it was a precautionary measure which government decided to implement in case the deficit-reduction targets are not reached," Fenech said.

The finance minister said a detailed plan had yet to be compiled and published.

Fenech has already announced that €10 million of the €40 million will come from salaries and wages, by not replacing one out of every two who retire when they reach retirement age, and cutting on overtime. He has insisted that health, education and other essential services will not

Fenech was reacting to a press conference by Labour MP Helena Dalli, in which the MP attacked the budgetary cuts that were announced months after Budget 2012 was announced. He described Dalli's comments as "unacceptable". 

"Government has managed to stay on track for its deficit-reduction targets, also thanks to its membership in the single European currency. Government's programme is reaping results, and it is in that spirit that we took the important step to entrench the obligation of a balanced budget in the Constitution."

Fenech quoted a recent report by the International Monetary Fund that states that Malta's effective action to correct its excessive deficit had restored confidence in its public finances.

The deficit is estimated to have narrowed to 3 percent of GDP and the primary balance turned into surplus for the first time since 2007. Following the additional expenditure measures in January, the fiscal deficit is expected to fall further this year.

The IMF report however says the composition of this adjustment remains suboptimal, "relying excessively on one-off and revenue measures."

Fenech also quoted Eurostat data that found Malta was the EU member state with the greatest cut in government debt between the third quarter and second quarter of 2011. Malta cut debt by 1.6% by October 2011, down to 70.3% of gross domestic product from 71.9%. Government debt stands at €4.47 billion. Compared to the same quarter in 2010, debt is down by 0.1%.

Prime Minister Lawrence Gonzi announced his ministers would be forfeiting their parliamentary honoraria as part of the €40 million in budgetary cuts on 6 January, when announcing a cabinet reshuffle.

The 0.59% cut in government spending, after  European Commissioner Olli Rehn informed the Maltese government on 11 November - three days before the last Budget - that Malta will have to meet its target for a deficit that is lower than 3% of gross domestic product.

The finance ministry said the budgetary cuts will comprise of reducing €6.85 million in new recruitment; €2.75 million in overtime; €4.68 million in operations and maintenance; and a massive €14 million in programmes and initiatives and €11.4 million taken away from public sector entities.

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ghanna bzon ta tielet partit,inkella sa nibghu x y jew y x,kull darba, xejn gdid,jien ghandi kwazi 100 sena, u dejem listes nafu hawn,anbjent brown,ahna rridu amjent ahdar li jpaxxi l-ajnejn.
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Who is to believe every word coming out of a donkey's mouth?
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Tonio fenech.....l-akbar cuc Malti li qatt lahaq jew ahjar lahquh ministru. Cuc kien sindku u cuc akbar sar ministru.
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At the moment it seems that this goverment is highly keen on recruiting employees in various sectors. This is going to cause a greater deficit in the future. Here we are talking about highly paid jobs being probably handed out as favours for persons who are friends of the inner circle.
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Anette B Cassar
Eddy, to people like you and me yes it is obvious. However, it is obvious that LG and TF can still take their herd for a ride.
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Isn't it obvious why Tonio Fenech and Dr. Gonzi are going to wait till June to decide about the €40 million cuts ? So that they won't have to reveal where the cuts will be coming from, if a general election is being planned for May/June !!Eddy Privitera
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With all due repsepct to the junior accountant turned Minster of Finance , there are two important points: 1) If the budget could do without the inclusion of these 40M , why did he include them in the budget the first time? Our financial situation does not allow for these 'precautionary measures' which acatually increase our deficit, and are not 'precautionary'at all. Is this the vision this govt has and the diligence with which it handles taxpayer's money 2) Why is the EU's impostion to get back on track by 40M is considered a 'bravura' by Tonio Fenech? Il bravura is when you get it right first time, not when someone raps your knuckles, Minsiter!
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Labour spokeperson Dr Helena Dalkkli gives a press conference in the morning to slamm Finance Minister Tonio Fenech bwcause the EU is ordering him to slash away 40 million euro from 'his' budget and your paper splashes his photo for all of us to see. Minister Fenech replies to Dr Dalli and again we see his picture all over the place. Don't tell me that somebody at San Gwann is that kind of fan of GonziPN's financial whizz kid ! Or, perhaps somebody doesn't like Dr Dalli's face. Make your guess
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L-ewwel u qabel kollox il-Gvern irid jaqta minnufih il-performance bonuses, il-karozzi + il-petrol, l-mobile u telephone b'xejn li qed jaghti li dawk id-Diretturi u mpjegati ohra li hemm mal-Gvern ghax dawk qed johduhom ta' xejn ghax ix-xoghol isir minn ta' tahthom ibda mill-izghar skrivan. It-tieni, hawn qabda mpjegati mal-gvern li jahdmu f'dipartimenti li tarahom bil-karozza/van/trakk issuplixxut mill-Gvern, (dawn generalment ikunu mikruja ghax hekk il-moda ma dan il-Gvern li jgawdu tal-klikka), dawn tarahom kulljum il-hin kollu jekk hu b'inhar jew bil-lejl, Sibt u Hadd dejjem jigru bihom u juzawhom ghal kollox ghax anka n-nisa taghhom tarahom ghaddejin bihom. Hemm il-hela u nahseb li jekk jaqta dawk biss igib il-€40 miljun. Barra minn hekk hemm ruxxmata(mhix zghira) ta' mpjegati mal-Gvern li jmorru jiffirmaw/jippancjaw fis-7:30 u jitilqu lura lejn id-dar u jmorru jaghmlu l-part time u mbaghad fil-5:00 jergghu jmorru jiffirmaw u meta jkunu jridu joqghodu bil-fors ghax ikun hemm il-bzonn li joqghodu xoghol bil-fors ikunu jridu t-time in lieu. Hemm anke min imur jahdem mal-kuntrattur li jkun qieghed jahdem xi offerta minn tal-Gvern u naf x'qed nghid. Abbuzi, abbuz u abbuzi u dan ta' fuq jafuh imma ghal xi raguni ma jridux jiehdu azzjoni u issa la riesqa l-elezzjoni nahseb iktar u iktar ma jaghtux kaz ghax hemm dik il-bicca karta li nghidulha l-VOT. Qum minn hemm Sur Gvern u Sur Ministru tal-Finanzi ghax reqdin wahda nobis qiskom bil-loppju.
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Mill-pagi taghkom dak Tonio??!!