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Indeed, a shocking matter

The recent issue of the alleged shocking €250 million over-spend by the Government for 2016 is an eye-opener to the independent-minded observer of the shabby way important issues are sometimes treated, with hardly any respect to the intelligence of the population at large.

Here we have a subject which for any Opposition should be an easy target – public expenditure.  Government is essentially an elected group of persons which is delegated and trusted with peoples’ hard earned money, to be spent in a collective manner, primarily on security, health, education, pensions and family benefits. By its very nature this process is surrounded by a real and founded fear that public money is not spent with the same attention, care and responsibility as if it were one’s own.

That is why the Constitution, the legal framework, the various institutions and offices such as those of the Auditor General and most recently of the Fiscal Council, not least Parliament with its Public Accounts Committee, as set up in democratic advanced countries, are there to safeguard these monies.

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The Opposition is given a crucial role in this large and intricate framework of checks and balances. It is its duty to be ever so watchful to ensure that the electorate has in it a counterbalance to whoever is in government. It would in fact be shirking its responsibilities if the Opposition does not critise government on a regular basis.

An annual opportunity comes in Parliament around December when government needs to seek the Parliament’s approval to extend the public expenditure ceiling for that year in view of supplementary expenditure over and above what had already been approved a year before for the year’s Budget. Each year as it should an Opposition raises legitimate questions as to their justification and their effect on the ultimate bottom line – the country’s deficit and its debt.

Well this time our Opposition did and it didn’t. It was only come late December that one of the Opposition shadow ministers spoke about the supplementary expenditure. A €250 million alleged figure of over-expenditure was not something to let go by without making an over-kill. The MP from Gozo did, over various media channels. He said he was shocked beyond belief and accused government that the approval was planned at a time when people would be distracted by the holidays. Not to be outdone the three shadow ministers delegated with economic and financial matters sought and got a press conference on the same shocking discovery.

And here lies the real matter to ponder upon. The electorate expects the Opposition and in particular the three shadow ministers delegated to these affairs to be on top of the matter. If they are discussing a small but important document which was tabled and debated upon a few weeks before in Parliament they are expected to have the rudimentary data at their fingertips. At the least the one and only total expenditure figure itself.

Instead the two honourable gentlemen and the honourable lady did not even consult the document and check the basic figure. If they bothered they would have found that the amount quoted by their colleague was erroneously over-calculated by about a hundred million euros.   The format of the financial report has been specifically established way back in the past, to be most transparent, by using the same classification of the Budget Financial Estimates, by Ministry, by type of expense and with generous explanatory notes. Furthermore, having been in government for some 25 years one would have expected them to have checked whether this was indeed a shocking and exceptional figure, never to have occurred before, or if not how it compares to previous years’ outturns.

They did not. Pity. If they did they would have found that at 3.6 percent this expenditure was the third lowest figure presented by the government since the year 2000. It compares favourably with 8.4 percent in 2009 or 16.1 percent the year before. What’s more if they bothered to open the pages they would have found the explanations they claim they are seeking.

It would take more than an act of financial wizardry for a finance minister to lose control over the public finances and at the same time reduce its deficit and the debt ratios, as attested by the Commission, the IMF mission and S&P who have recently upgraded Malta for its prudent financial governance.

In this vein if the evaluation by the shadow ministers would have gone one notch higher they would have noticed that there is a big difference between a year where both the revenue and expenditure turn out higher than projected as has been the case in the last three years thus leaving the deficit unaffected, and an expenditure over run combined with a revenue shortfall, which was the case of every year, with one or two exceptions, during the previous recent legislatures resulting in unacceptable record deficits, touching the 9.1 percent mark in 2003.

More relevant is that now with the Fiscal Responsibility Act all over the budget expenditures have to be approved by the Finance Minister prior to their being spent.

It is this kind of evaluation and in-depth analysis which the electorate rightly expects from the Opposition and not off-the-cuff shoddy remarks. Of course if it wants to be seen as a government-in-waiting.  Seriously.

 

12.01.2017

 

 


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