The Prisoners of Azkaban

The Malta Independent



Min Dalli whilst denying the existence of the Wizard of Oz in the first part of the budget speech behaved like Harry Potter in putting the budget together. In fact the budget is full of secret chambers making the HP connection much more apt.

His strong assertion that great progress has been made in addressing the budget deficit is disproved by his own figures. The projected deficit of Lm78 million for this year cannot be reached by normal progression of things given that the reported deficit as at October 2002 (10 months) was already Lm91million. In no other period in the last five years was the government cash flow positive in the last 2 months. Last year a deficit of Lm82 million by October 2002 ended at Lm86 million by December, up by a marginal Lm4 million in the last 2 months.

`His strong assertion that great progress has been made in addressing the budget deficit is disproved by his own figures` To finish at Lm78 million in accordance with the Minister`s revised figure government cash flow would have to be net positive by Lm13 million in the last 2 months. This cannot happen in the normal course of events unless more financial transactions are engineered similar in scope to the MIA sale and leaseback deal.

But let`s for a moment assume that the Lm78 million will be magically hit by end December. Adding on to this the one-off revenue flows from the infamous MIA deal (Lm21 million) and Income from the one-off special registration scheme (Lm7 million) would bring the structural deficit back to Lm106 million.` This is exactly were the budget for 1998 was projected to end and would have ended had Min Dalli not moved in to change the accounting policies and HP-like turn a deficit of Lm82 million as at` September 1998 to Lm150 million by the year end.

`The critics seem to have been put under a spell like the Dementor in HP`s next instalment The Prisoner of Azkaban.` So reality is that Lm242 million tax revenues increases over 1999-2002 have served for nothing but to finance increased expenditure. So much so that over the last four years national debt increased by Lm305 million, privatisation revenues generated Lm105 million and extraordinary revenue from sinking fund wind-up and MIA structured deals produced so far Lm58 million giving total financing of Lm468 million averaging Lm115 million pa. which is nearer to the real average size of the deficit these last 4 years.

Rather than a budget this is more like a fudge-it. In the face of all this fudging, the Press, especially the English language press, seems spellbound ignoring the reality underneath the thin gloss surface coating and giving benign though timid approval to the budget.

Nobody seems to question how is it that ordinary expenditure that increased by Lm43 million in 2002 over 2001 in spite of 2002 being a wage freeze year for public employees, will in 2003 increase only by Lm20 million, of which Lm6 million will go for new support to local farmers and fishermen leaving just Lm14 million to fund increased operational expenditure including wage increases.

HP`s magic spell seemed to have frozen all critics analytical skills and forced them to join the chorus lauding Dalli for succeeding in his 9 budgets to sink us up to our ears in debt and getting an average real growth increase over 2001 -2003 of under 2%p.a.. The critics seem to have been put under a spell like the Dementor in HP`s next instalment The Prisoner of Azkaban.