Nationalist Party hits back at finance minister on government deficit

The Nationalist Party has insisted that the government explain what has led to the government registering a deficit of €70 million, rather than the surplus it was projecting.

In a statement on Tuesday, the PN pointed to the government’s financial estimates for 2019, published last October, in which it is stated that the government’s consolidated fund would end with a positive balance of €16.6 million.

“According to the same document,” the PN said, “government was budgeting to collected €1,682 million from income tax. Actual income tax receipts in 2018 amounted to €1,573 million, a shortfall of €109 million or 6.5%.”

It added that grants, which include reimbursements from the European Union “were also overstated” in the budget by roughly €54 million.

“Government should explain what led to the shortfall in these incomes steams in such a short period of time,” the PN said., adding that it had every right, and a duty even, to ask what led to the “reversal in fortunes”.

Last week, the Finance Ministry pushed back against claims by the PN, which said government had “bloated the daily cost of dunning government”, insisting that such costs were being financed by one-off revenue streams, which it said were now running dry.

“The lack of a proper reading of basic national financial statistics by the Opposition is once again very telling,” Finance Minister Edward Scicluna said on Saturday.

However, the PN said that to date, Scicluna had given three different explanations.

“In his first reaction, he blamed the public service collective agreement, in the second instance he blamed the capital projects and in this latest round, he is blaming the reversal of fortunes on cash flow management,” read the statement.

READ MORE: Finance ministry accuses Opposition of ‘improper reading of basic finance statistics’

“The Opposition is fully aware that the final position on the country’s surplus or deficit can differ once certain adjustments are made, particularly with regards to monies due from the European Union for capital projects part-financed through various programmes. But government should have factored in this discrepancy when presenting its projections in October.”

Government, it said, should have known what monies would be received by the end of the year, “yet presented to parliament a situation that was off the mark by €80 million”.

Turning to the sustainability of government finances, the PN said it wanted to reaffirm its view, which it said was also shared by the European Commission, that “government is financing its burgeoning recurrent expenditure with one-off revenue streams and income streams that in the short-to-medium term could dry up of suffer from cuts”.

Funds from Malta’s cash-for-passports scheme, EU funds and tax funds, were all included in this category of “funds-at-risk”, the PN said.

Finally, with reference to comments made Scicluna regarding to a leaked interim report from a Moneyval evaluation, the PN said that the likelihood was that the final report would not differ much from the draft report.

“This means that our country will, come July, be facing the prospect of being blacklisted,” the PN said. “Government, rather than owning up for its shortcomings that led to this sorry state of affairs, is already implementing its favourite strategy of shifting the blame onto the Opposition. For the record, the Opposition has immediately denied having seen the draft report or leaking it to the press. The report was only made available to to government.”