Government ministries and entities have been ordered to save about €200 million by cutting down on administrative costs.
The savings will make up for the government’s injection of funds to keep energy and fuel rates stable and will also help bring the deficit back in check.
Senior government sources said the plan is to mitigate the impact of energy subsidies on public finances. In a months-long exercise, savings were identified during one-to-one meetings with each ministry and entity.
The approximate target of around €200 million by the end of the year is the amount the government is spending to keep energy prices stable.
Further cuts for 2023 will be announced during the October budget, the sources said.
Prime Minister Robert Abela has given his commitment to keep energy and fuel prices stable in the wake of rising international oil and gas prices.
Finance Minister Clyde Caruana told parliament earlier this month that had the government not subsidised cereals, milk, fuel and energy, the cost-of-living adjustment next year would have been between €16 and €17 a week. Employers would have had to fork out an additional €800 to €900 per employee in 2023.
“We will do whatever it takes so that such challenges continue to be faced by the government, rather than businesses,” Caruana said.
It was cheaper for the government to keep up the subsidies than to deal with the blow that would otherwise hit the economy, he explained.
“This is not the time for austerity for our people. The government will, however, still need to be more diligent than ever.”
Central Bank governor Edward Scicluna recently warned that the government should not lose sight of its target to bring down the deficit.