Shipyards, wages, medicines main contributors to deficit
Less EU funds spent in 2009, MCAST investment falls by €26 million
Matthew Vella Even in the aftermath of the demise and privatisation of the Malta Shipyards, the docks were responsible for at least 60% of the government’s overspending in 2009.
Government expenditure and debt repayments went awry by some €162 million than what was originally budgeted, bringing total spending for 2009 up to €2,689 million – 6.4% more than previously budgeted.
An additional €44 million was forked out by the Finance Ministry due to the closure of the shipyards, and an increase in Malta’s contribution to the EU, which is financed by customs, levies, and VAT. Another €42 million variance was spent on servicing debts incurred by the Malta Shipyards.
And the budget for the Ministry for Infrastructure, Transport and Communications will also overshoot by €22 million by the end of the year, again due to pensions and gratuities paid to former shipyard employees.
The Health Division’s budget overshot by €23.7 million, due to a bigger expense on medicines and surgical materials, and losses incurred on influenza protection. More variances are expected on contractual services and contributions to the Mount Carmel Hospital and the National Blood Transfusion Centre, as well as wages and salaries.
Most of the variances in other government sectors were largely due to increase in wages and salaries, except for the national treasury which paid €11.4 million less in emoluments.
But the extra salaries were incurred across the board, meaning that the benefits of collective agreements were not budgeted well. These increases accounted for at least €21 million of the variance for this year, across various ministries. Included in this figure is €7.8 million for the Armed Forces of Malta and its immigration-related programmes, €3.8 million for education salaries. Another €10 million was forked out over above the education ministry’s budget for salaries to Church school teachers, university and Junior College staff, and MCAST subventions.
Less capital spending
As expected, capital expenditure on infrastructural projects will decrease by €36 million by the end of 2009.
Of note is the €26 million less spent on the new campus for the Malta College of Arts, Science and Technology – previously considered to be a cornerstone of Lawrence Gonzi’s centre of excellence in education for 2015.
Another €14 million less was spent from the EU funds allocated to Malta for 2007-13 by the Ministry of Social Policy. The ministry of Infrastructure will spend €17 million less than what it expected from structural and cohesion EU funds, while Gozo will spend €1 million less from EU funds.
Increase in capital spending however took place inside the Office of the Prime Minister, where an additional €1 million was spent on marketing Malta as a tourism destination.
Of particular note is an increase in €8.2 million spent by Malta Enterprise to counter the reduction of economic activity due to the global recession, and €12.8 million more spent by the Home Affairs Ministry from the EU’s refugees and external borders funds.
Total capital spending for the year will be €264 million by the end of 2009, 11% less than what was originally budgeted.
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