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Business • July 04 2004

Budget cuts were tuned to revenue expectations

The Lm10 to Lm13 million cut from various ministries budgets were planned not merely as cuts but to be in line with expected revenue.
While it is known that cuts were made to the MTA budget, the government is not letting on which other departments or organisations were affected.
In fact while it was Cabinet that took the decision on the cuts, there was no decision as to which budget lines should suffer.
“After careful evaluation of the expenditure commitments of the various Ministries, the Ministry of Finance proposed a number of expenditure curtailment measures to meet the set targets.
“No across the board percentage cuts were effected. The Ministry of Finance proposed reductions, which were subsequently approved by Cabinet. The reductions were quantified at a Ministerial Level. While recommending the areas as to which the deductions should be targeted, the Ministry of Finance, left it to the relative minister’s discretion as to where, that is, which department of entity, the reductions are to be effected,” a Finance spokesperson told sister newspaper The Malta Financial and Business Times on Wednesday.
When asked whether he could state which areas of government were actually affected, the Finance ministry spokesperson said that the cuts may still not have been decided upon by the various ministries and each minister would have to decide within the coming months.
A Lm13 million cut in expenditure represents a decrease of 1.4 percent and the ministry said the cuts were made “within the context of maintaining the deficit target for 2004 to the budgeted figure of Lm 94 million.”
“The budgetary review process that took place was not a mere cost cutting exercise but a realistic evaluation of the expected revenue targets,” a spokesperson for the finance ministry told The Malta Financial and Business Times.
“This spending review was also performed in the light of available economic indicators and other expenditure requirements, such as the acquisition of medical devices and other pharmaceutical items that are required by the hospital to sustain its service levels till the end of the year,” the spokesperson explained.




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