Words and fiigures still disagree

Maltastar

Words and figures continue to disagree

Government heaps glory on itself for the supposed achievement in reducing government structural budget deficit. In so doing it claims that the starting position at the end of 1998 ( government was sworn in on the 8th of September 2001) was Lm150 million.

The myth was belatedly but effectively smashed by Labour when it proved conclusively that the parting position was far from Lm150 million. Effectively it was planned to be Lm115 million at the budget stage presented in November 1997 and actual structural deficit as at Sept 1998 was Lm88 million broadly in line with original projections.

In the last quarter of 1998 as soon as Min John Dalli had time to re-organise his desk and switch on his computer once the re-election euphoria had died down, he` went on to a careful window-dressing exercise shooting up the budget deficit for 1998 to the maximum to create an advantageous starting position` with which to measure his supposed eventual` achievements.

But why should we take the parting position as December 1998` I think it is more realistic` to take the parting position as the end September 1998 when the Minister had still not cooked the books.` As can be seen from the table accompanying this article the structural deficit for the 9 months to Sept 1998 was Lm88,011,000. The structural deficit for the 9 months to Sept 2001 was Lm88,107,000.

There has not been a single lira of deficit reduction on a true like for like figures of the National Statistics Office in spite of having contributed to government Lm98 million more in tax under the headings of Customs and Excise, VAT & replacement, Income Tax and Social Security in the 9 months of2001 than in the same period of 1998. We also collectively paid some Lm15 million more on fees, licences or whatever term the Minister pleases to describe the government charges for the services it renders to its citizens. An increase in ordinary revenue of more than Lm113 million and not one lira drop in the structural deficit! How dare the government claim success in reducing the deficit`

Having smashed the myth that the deficit is effectively being addressed the Prime Minister shifted his defences by claiming that under Labour`s 22 months inter-regnum between his nearly 15 year stretch in government,` Labour did not manage to control and reduce the deficit.

Even this claim has to be challenged as not supported by official figures. Yet another case of words and figures disagree.

Labour was sworn into government on 28th October 1996.` Lest anybody dares claim that in the last 3days of October Labour played some `John Dalli` type of window dressing tricks in the accompanying table,` I also give official National Statistics Office figures for the government deficit on` January to September basis of 1996 and 1997.

The structural deficit of the first 9 months of 1996 under an outgoing nationalist government was already Lm106,442,000 and eventually finished the year at Lm124 million instead of the Lm38 million which John Dalli had planned when presenting the 1996 budget in November of 1995.

In 1997 Labour contained the deficit within the same figure of Lm106,553,000 in spite of passing special loans of Lm24 million to Malta Drydocks accounted for under Capital Expenditure.` It then effectively reduced this deficit to the Lm88,011,000 earlier mentioned in the first 9 months of 1998.

In two years between September 1996 to September 1998 largely under a Labour government the true structural deficit was reduced from Lm106,442,000 to Lm88,011,00 a reduction of` Lm18,431,000 equivalent 17%.` During the same period government ordinary revenue increased by Lm42,120,000.` So out of every Lm1 of additional revenue from taxation Labour government applied nearly 44 cents to reduce the structural deficit.

Compare this to the present government record where with Lm113 million more in ordinary revenue this year than in the same period of 1998 it did not reduce the deficit by a single lira.

It is high time that Labour starts challenging the void claims of success in deficit reduction with real facts and figures which show the exact opposite.

While the nationalist government is scoring successes in tax collection and enforcement by taxing the salaried middle income class,` its lax expenditure habits is blowing it all away.` No wonder the official national debt now stands at Lm1,023,000,000 apart from another Lm400 million hidden in the Treasury Clearance Funds and in dead bank loans guaranteed and serviced by government. And no wonder privatisation is now being approached in a sense of crisis having practically fully exhausted the country`s borrowing capacity.

The problem is that when the roof will financially and unavoidably cave in it will again be the lower and middle class that will be forced to carry the brunt of the damage`..unless a serious Labour government is elected in time to engineer a rescue operation from the impending` crisis.