Finance Minister Edward Scicluna today described the Fiscal Responsibility Act, approved by Parliament recently, as a milestone that would introduce controls on public expenditure.
Prof. Scicluna told a news conference that the aims of the law were to increase efficiency in expenditure, set ceilings and introduce more controls on public expenditure.
He said that although the government had obligations with the EU, there had been no legal provisions on transparency locally before this law was enacted.
In line with the new law, the government would publish a three-year rolling plan listing its fiscal policy and priorities. It would create a Fiscal Council which would oversee the plan and prepare an annual report on its implementation.
The council’s chairman would be appointed following consultation with the Opposition and could only be removed by a Parliamentary resolution.
Prof. Scicluna said that whereas in the budget the government looked back at the preceding year, there would now be a detailed report in March or April, enabling the collection of data to cover a whole year.
He said that the law also stipulated the drawing up of a half-yearly report on that year’s plan with details on any variances. This would be followed by the draft budget and then the budget.
Although the law also stipulated contingency reserves to cover slip-ups or over-expenditure, these would have to be justified with the Fiscal Council, that would be answerable to the Public Accounts Committee.
Asked whether the government planned to change the way the cost of living adjustment was calculated, he said that this was calculated by an automatic mechanism that had been in place since 1991 and the government did not plan to touch it unless concerns were voiced within the Malta Council for Economic and Social Development.
– Thursday, 24th July, 2014