Government debt up

The structural budget deficit between ordinary revenue and total expenditure in the first four months this year amounted to Lm49.6 million, up from Lm36.7 million for the same period last year, the National Statistics Office said.

This amount does not include the contribution to the sinking fund in respect of local and foreign loans as well as less direct repayment of loans.

Government debt outstanding at the end of April stood at Lm1,049.1 million, up by Lm110.2 million, or 11.7 per cent, from Lm938.9 million outstanding at the end of April last year.

At the end of April, government debt was Lm36.4 million more when compared with the end of last year. Compared to one month earlier, government debt was higher by Lm3.3 million.

The interest portion of public debt servicing costs has increased by Lm3.6 million this year, from Lm19.8 million during the first four months of last year to Lm23.3 million during the period under review. This increase was mainly the result of loans borrowed during 2001 and more resort to Treasury Bills this year than last year.

Over the first four months of the year, an increase in ordinary revenue was outstripped by the increase in total expenditure.

Ordinary revenue from January to April of this year increased by Lm6.2 million (three per cent) compared to the same period last year, and amounted to Lm215.3 million.

Ordinary revenue made up 29.3 per cent of this year`s budget forecast.

At the same time, total expenditure amounted to Lm268.6 million, an increase of Lm22.2 million, or nine per cent, over the January to April period last year.

However, the office said that one had to bear in mind that for 2002, about Lm4 million corresponded to once-only payments in connection with the MDD/MSCL early retirement schemes.

The increase in ordinary (or recurrent) revenue was mainly due to higher income of Lm5.2 million under the licences, taxes and fines head of revenue, and was made up of receipts in connection with oil exploration fees and duty on documents and receipts previously shown under the lotteries head of revenue.

At the same time, an increase of Lm4.8 million over the amount received last year has been recorded under fees of office, mainly through proceeds from the foreign investment scheme registration tax.

Income tax receipts in the first four months of the year amounted to Lm44.6 million, a marginal decline from Lm44.8 million received last year. This decline was brought about by a time-lag receipt of almost Lm3 million provisional tax payments which last year were received at the end of April.

Recurrent expenditure, excluding public debt servicing, during the first four months of the year amounted to Lm208.1 million, an increase of Lm13.5 million or 6.9 per cent over the Lm194.6 million expended last year.

However, total expenditure for the period under review for 2001 and 2002 were both just above the 32 per cent mark when comparing the current year`s data with the budgetary estimates and last year`s data with the actual final outturn.

Personal emoluments to April this year amounted to Lm65.1 million, and stand at 33 per cent of the budget (Lm197.64 million). Last year`s outlay for this category amounted to Lm64.3 million, and accounted for 33 per cent of the final outturn (Lm194.96 million).

Likewise, operational and maintenance expenses as well as outlay in respect of special expenditure were by and large on the same level as last year.

This year`s expenditure on programmes and initiatives increased by Lm5 million and amounted to Lm106.5 million. This figure represents 31 per cent of the budget forecast for this year (Lm341.7 million), as against the 32 per cent of last year`s final outturn (Lm321.56 million).

Within this category increases were reported for Treasury pension payments (+Lm1.96 million), social security benefits (Lm1.28 million), and NPAA-related initiatives undertaken by the Education Ministry (Lm1 million).

The outlay on the contributions to government entities category this year amounted to Lm19.1 million, an increase of Lm 7.8 million over the Lm11.3 million expended last year.

However, this increase includes Lm6.8 million which during 2001 were accounted under capital expenditure as operational and debt servicing costs of entities like Malta Drydocks and MGI/MIMCOL.

Furthermore, Lm1.8 million Water Services Corporation debenture interest payment to government (which will be subsequently recorded under revenue in May), this year was effected in April, while last year this transaction was effected later on in the year.

Percentage-wise, the government entities contributions this year account for 26 per cent of the budget (Lm72.41 million), against 22 per cent spent during the same period last year when compared with the final outturn (Lm52.04 million).

So far as the capital budget is concerned, this year`s expenditure has increased by Lm2 million compared to the first four months of last year. This comparative increase was due to higher expenditures on the new hospital programme, and the school building programme. This year capital expenditure excludes Lm5 million, representing outlays in respect of entities which last year featured under capital expenditure, and this year are being reported under recurrent expenditure.

Treasury Bills and Malta Government stock accounted for Lm197.8 million or 18.9 per cent, and Lm812.9 million or 77.5 per cent respectively of the debt. The remaining share of Lm38.5 million or 3.7 per cent was made up of foreign borrowing.