Tuesday, 2 April 2013

Ex-Fin. Min. capacity to err knows no limits

He should look us straight
in the eye and explain
On the 28th November 2012 the former Minister of Finance Mr Tonio Fenech presented the Budget for 2013 in parliament even though he knew that government had no parliamentary majority to get it approved.

There were 33 days left till the end of the the year.  Surely one must assume that government had a clear indication of what its financial position was when the budget was being read and could be fairly accurate in budgeting a mere 33 days forward.

So when the Minister projected that the Central Government deficit for the whole of 2012 will be  €180 million equivalent to 2.65% of the GDP, which reduces further to 2.3% of GDP when adjusted to include in the deficit calculation elements of extended government,  it was accepted by most..... but not by all.

I for one did not accept it.    The figure did not make sense with the published deficit for the 9 months to September 2012 and the normal flows in the last quarter of the year.

I made the point extensively in an article found of this blog,  specifically:

A Budget for the others - 02 12 2012

where I said:

The published deficit for the first nine months of 2012 is €282 million but, according to the figures given in parliament, by the end of December this deficit will be reduced to €180 million. So the Minister is planning that the last quarter of 2012 will prove cash positive to the tune of €102 million compared to cash negative €31 million last year and cash positive €3 million in 2010.
Don’t look for any explanations in the budget speech as there are none, even though the minister found all the time to explain much less relevant items. What I can say is that the actual figure for the deficit of 2012 will only be announced late in March and by that time we could be in the post-election period.

The numbers do not add up - 29.11.2012

The end, like the ides, of March have come and now we have the official central government deficit for 2012.   NSO released them on 28 03 2012, and guess what?

Rather than the projected deficit of  €180 million the deficit came out as € 362 million, more than double the amount projected in the Budget?

How can anyone calling himself Minister of Finance and professional accountant make an error of this size?    You just don't!   This was not error.  It was a deliberate attempt to mislead and give a totally unrealistic picture of government's financial position in a desperate attempt to turn around  government's fortunes at the polls.

The former Minister of Finance has an obligation  to explain why he erred so grossly.   And if he made such a gross miscalculation when just projecting 33 days forward,  what confidence can we have that the other figures in the budget for the whole 2013 are realistic?

Zilch I would say.

1 comment:

  1. I always doubted this man's figures no matter how much spin he put to his tripe of propaganda this jackass of ex Minister of Finance spooned to the Maltese people in this difficult economic and financial crisis! However at the end the truth always wins.