Maltastar
Two pieces of news in Monday
morning’s papers continue to accumulate evidence of the crisis ruling the state
of public finance.
‘Standard & Poor’s Agency lowersMalta
S&P have shown their irritation that it has already been conceded that this years’ budget deficit will be a far cry from the budgeted 4.6% of the GDP from the 5.2% of last year. The final outturn is expected to exceed 7% of GDP. S&P have also shown their concern at the speed with which public debt is accumulating and they forecast that public debt plus theFreeport Maastricht
In fact S&P spokesman was quite explicit. Apart from lowering the rating on local debt it warned of further downgrades as follows: “Failure to decisively address current trends in the fiscal deficit would undermine prospects of an early participation in EMU and weaken the government’s credit standing”
The Finance Minister was reported to
have commented that there is a dire need for a change of mentality to convince
people that the government does not provide money like money from heaven. The
Minister added that a broad-based effort is needed to deal with the issue in an
objective and national manner, rather than play out for the gallery.
What a difference a few months make! Just a few months back in a TV debate during the election campaign when I had made the same sort of criticism that S&P are now making, the Minister was over-flowing with confidence that all was well, that people can put their mind at rest and the manna from heaven would rain more plentifully once we re-elect him to power and once we join the EU.
I do certainly agree that the crisis is in such a deep measure that the government on its own cannot handle it, and needs all the help it can get in the national interest to avoid a painful financial collapse. But this should not exclude a full investigation on whether the government purposely misrepresented the state of public finance both when presenting the last budget in November 2002 as well as when in the election campaign in March/April 2003 it consistently re-assured us that public finance were in good shape and getting better.
The second piece of news which mounts the evidence of the crisis was found in The Malta Independent informing that tomorrow the government will announce the re-opening of the Investment Registration Scheme. This Scheme was closed last year when we were assured that it was a one-time only chance for people to regularise their income tax and exchange control infringements of their foreign investments by paying a once only amnesty fee.
Re-opening it so soon is nothing other than a crisis measure to tap some new sources of revenue in order to cushion the over-blown deficit of this year. In fact the budget had projected Lm6 million special revenues from ancillary but unexplained sources. Is this the source? Did the government plan to re-open the scheme when it was re-assuring all that that was a one-off exercise?
‘Standard & Poor’s Agency lowers
S&P have shown their irritation that it has already been conceded that this years’ budget deficit will be a far cry from the budgeted 4.6% of the GDP from the 5.2% of last year. The final outturn is expected to exceed 7% of GDP. S&P have also shown their concern at the speed with which public debt is accumulating and they forecast that public debt plus the
In fact S&P spokesman was quite explicit. Apart from lowering the rating on local debt it warned of further downgrades as follows: “Failure to decisively address current trends in the fiscal deficit would undermine prospects of an early participation in EMU and weaken the government’s credit standing”
What a difference a few months make! Just a few months back in a TV debate during the election campaign when I had made the same sort of criticism that S&P are now making, the Minister was over-flowing with confidence that all was well, that people can put their mind at rest and the manna from heaven would rain more plentifully once we re-elect him to power and once we join the EU.
I do certainly agree that the crisis is in such a deep measure that the government on its own cannot handle it, and needs all the help it can get in the national interest to avoid a painful financial collapse. But this should not exclude a full investigation on whether the government purposely misrepresented the state of public finance both when presenting the last budget in November 2002 as well as when in the election campaign in March/April 2003 it consistently re-assured us that public finance were in good shape and getting better.
The second piece of news which mounts the evidence of the crisis was found in The Malta Independent informing that tomorrow the government will announce the re-opening of the Investment Registration Scheme. This Scheme was closed last year when we were assured that it was a one-time only chance for people to regularise their income tax and exchange control infringements of their foreign investments by paying a once only amnesty fee.
Re-opening it so soon is nothing other than a crisis measure to tap some new sources of revenue in order to cushion the over-blown deficit of this year. In fact the budget had projected Lm6 million special revenues from ancillary but unexplained sources. Is this the source? Did the government plan to re-open the scheme when it was re-assuring all that that was a one-off exercise?
Portfolio
Strategy 1: No Risk Lm 1006.847
Strategy 2: Medium Risk Lm 1011.590 (after Lm40 charges)
Strategy 3: High Risk Lm Lm 1191.366 (after Lm20 charges)
Strategy 4 High Risk For Currency . Lm 1066.390 (after Lm40 charges)
All prices and rates of exchange are the latest available onSaturday 23rd
August 2003 .
All strategies continued to move forward but the biggest leap was registered in strategy 4 which is heavily weighted on foreign equities.
Strategy 3 which consists entirely of Maltacom’s equity also moved slightly ahead. But this strategy has made nearly 20% since 1st June when the portfolio was started and given some disappointment with Maltacom not moving to an interim dividend and their taking a full charge of a VAT claim which they are still defending ( such measure could in fact weaken their position in defending their claim before the VAT Appeals Board) I decided it is time for profit taking . I am encashing Strategy 3 and keeping Lm1191,366 less 1% encashment charge = Lm1180 in cash liquid form until I decide where to invest next in the coming few weeks.
No other changes were made to the portfolios.
Strategy 1: No Risk Lm 1006.847
Strategy 2: Medium Risk Lm 1011.590 (after Lm40 charges)
Strategy 3: High Risk Lm Lm 1191.366 (after Lm20 charges)
Strategy 4 High Risk For Currency . Lm 1066.390 (after Lm40 charges)
All prices and rates of exchange are the latest available on
All strategies continued to move forward but the biggest leap was registered in strategy 4 which is heavily weighted on foreign equities.
Strategy 3 which consists entirely of Maltacom’s equity also moved slightly ahead. But this strategy has made nearly 20% since 1st June when the portfolio was started and given some disappointment with Maltacom not moving to an interim dividend and their taking a full charge of a VAT claim which they are still defending ( such measure could in fact weaken their position in defending their claim before the VAT Appeals Board) I decided it is time for profit taking . I am encashing Strategy 3 and keeping Lm1191,366 less 1% encashment charge = Lm1180 in cash liquid form until I decide where to invest next in the coming few weeks.
No other changes were made to the portfolios.
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