Labour to submit report to EU agency

A Labour Party report questioning the credibility of figures released by the National Statistics Office is to be presented to Eurostat, the EU's statistical arm.

The public has a right to an unequivocal explanation on what had led to the sudden positive turn in official statistics, Labour deputy leader Charles Mangion told a news conference yesterday.

Parliamentary Secretary Tonio Fenech criticised Labour for sending the report without waiting for an explanation from the NSO.

Figures released early in December showed that GDP was revised downwards between 1996 and 2003, and upwards since then.

Labour's unsigned report holds that although it is acceptable for past data to be revised to conform to standards set by the European System of Accounts of 1995, the NSO's persistent revisions to statistics beyond the past three years do not lend credibility to the statistics and the institution producing them.

Furthermore, since it is highly unlikely that new information is available about periods dating beyond the past three years, the NSO should provide detailed explanations for the revisions.

The report questions the increase in GDP by Lm7.7 million in 2004, Lm16.7 million in 2005 and Lm10.4 million for the first six months of 2006, which coincides with the start of Lawrence Gonzi's tenure as Prime Minister.

Although the NSO tried to dispel such revisions as insignificant, in reality various components were subject to significant changes, the report points out.

For example, manufacturing profits were revised downwards on average by 12.5 per cent per annum; profits for hotels and restaurants were revised upwards by 40 per cent in 2005 and losses were turned into profits in 2006 - despite the constant laments of the Malta Hotels and Restaurants Association over dwindling tourism figures. In 2005, the latest statistics show a significant upward revision of 7.6 per cent in the wage bill of the transport and communications sector at a time when the Air Malta rescue plan, which included nominal wage cuts, was being implemented.

The report questions other statistics. For example, in 2005, despite an upward revision of Lm9.2 million in the wage bill, private consumption was revised downwards by Lm3.5 million. In another instance, the deficit figure for 1996 was revised by Lm80 million.

Dr Mangion insisted it was not the MLP's intention to turn the NSO into a political football but it was important that statistics reflected reality.

Asked for the names of the report's authors, Dr Mangion said he could not divulge their identities, though he underlined they were a team of professionals.

He denied claims made by Parliamentary Secretary Tonio Fenech that the MLP was trying to undermine the credibility of the NSO and sowing doubts at EU level in the crucial last year before possible euro entry.

Incidentally, yesterday's report coincided with a visit to Malta by European Central Bank officials related to the adoption of the euro, sources have told The Times.

Contacted for comment, Mr Fenech said the fact that the MLP planned to send the report to Eurostat without waiting for the necessary explanation from the NSO only strengthened his claims.

"It's clear that the Labour Party wants to harm the credibility of the NSO and in the process try and derail the road towards the euro," he said.

Mr Fenech said he had no reason to doubt any of the figures, which are ultimately verified and audited by Eurostat itself. Besides, the NSO plans to answer to each of the questions made in the report, which he suspects was authored by somebody with an economic, rather than statistical, background.

"The MLP hasn't realised that we've joined the EU and persists in living in a vacuum," he charged.