Malta’s debt has increased by a staggering €3 billion – equivalent to 54% – over the past two years, according to information published by the National Statistics Office (NSO) on Christmas Eve.
This unprecedented increase in debt was mainly driven by a government spending frenzy, partly to counter the ongoing pandemic, and more worrying, to continue feeding a bulging public sector, including the employment of thousands of employees put on the State payroll.
The latest NSO statistics show that while Malta’s total public debt stood at €5.3 billion until November 2019, before the start of the pandemic, it hit €8.2 billion in November 2021. And there is still a month of spending to be taken into consideration in the final 2021 accounts.
Only in the past 12 months, between November 2020 and November 2021, the country’s debt levels increased by €1.4 billion over another €1.4 billion increase registered the year before.
In just two years, Malta’s finances have come full circle, from a surplus of €8 million in November 2019 to a deficit of €1.2 billion by the end of last month, together with a deficit of another €1.4 billion for 2020.
Country’s finances in freefall
According to the NSO, while the government’s recurrent revenue remained almost the same between November 2019 and November 2021, with a slight increase of €150 million due to increased proceeds from income tax and VAT, expenditure shot up by €1.3 billion over the same period.
While the NSO attributed most of this extraordinary increase in expenditure to the pumping of millions into the economy to keep it afloat, an analysis of the published figures shows that the government continued its spending spree in other non-productive areas, particularly by putting more and more people on the State’s payroll.
By last November, the public payroll hit an astounding €1 billion for the first time ever – an increase of €117 million in wages and personal emoluments over a period of two years.
This must be added to another heavy increase in the government’s contribution to various authorities and State entities, which in 11 months (until last November) reached €636 million, or €153 million more than November 2019.
This is also attributed to an extraordinary increase in additional salaries financed by taxpayers and the waste of funds on extraordinary contracts, such as the lease of new MBR offices at €2 million a year.
The Shift has already reported that the government has this year already spent €1 billion more than its own projections for this year.
Unsustainable situation
For many economists who spoke to The Shift, the current developments in the country’s public finances are way beyond sustainability. Many agree that the situation will be getting worse in the coming months as Robert Abela’s government enters its electoral test with the aim, analysts say, of getting a better result than his predecessor Joseph Muscat, so Abela can claim legitimacy as prime minister.
“There is no way to control this very serious situation without austerity measures. However, due to the current political cycle, this will be left for after the election, possibly through the presentation of the next Budget.”
Malta has now veered significantly from the debt and deficit criteria laid down by the EU for its Member States. While sanctions have been waived for the pandemic, Malta is expected to be first on the list of the EU’s new excessive deficit procedures once the rules kick in again in 2023.
Kull m ghamel dal gvern hu business fejn ra kif ser idahhal miljuni kbar fil but! Xejn izjed! Imma l poplu kuntent! L poplu aljenawh jiddejjen u jghoxa fil kantun!! Kompli capcap gahan ghax tieghek ghadu gej!
The incredible in public salaries, the vast majority of which were based on persons of trust (incompetence). If these were spent on people, in an open and transparent manner, based on experience, qualifications, honesty and able to see to their responsibilities based on a performance basis, one can accept that.
The millions dished out on direct contracts and the €400 million plus on the roads project, to alleviate traffic congestion has failed miserably.
The only way out of this situation, is for qualified, experienced independent Human Resources firm, to analyse these appointments.
The Auditor General must also have the necessary experienced and qualified personnel to get every single direct order and together with experts in the various fields where the funds were spent would certainly result that the PL administration was not only corrupt, but highly incapable to ensure that these funds were, in most cases down the proverbial drain. Hopefully that our drainage system can cope with the additional load.
We are allowing developers to accelerate building on an infrastructure (not only road works) that is well beyond it’s sell by date.
If Malta wants to get off the grey list at any time reasonable, these and other corrupt practices must be seen to. Obviously this must be closely linked to the evasion of taa and relative money laundering.
Unless we have a serious government is there to serve all, then we are losing the plot. Also, the PM must take serious action on his fellow members of the cabinet, the Labour Party and the General Workers Union then forget turning the administration wheel to overcome the financial, economic and wellbeing of Malta and Gozo.
All this may remind one about Mr Micawber’s sound advice to David Copperfield, expressed in plain English and Arithmetic:
“Annual income twenty pounds, annual expenditure nineteen pounds, nineteen shillings and sixpence – result happiness’
Annual income twenty pounds, annual expenditure twenty pounds, ought and sixpence – result misery”
Poor Mr Micawber, notwithstanding his idiosyncrasies, knew his economics quite well – even though he could never dream of billiions in deficit.
His empirical outlook on managing his family’s income – although eventually not adhered to by him, with the result of his landing in a debtor’s prison – should very well serve as a lesson to the guardians of this country’s purse!
Robert Abela has only staggering debt to show and he promises to be the best in the world. We must be crazy to believe him.
If LP wins coming election it’s good news for the inner circle, if not let the PN worry how to tackle dept. A win win for PL.
We, the honest citizens expect that all illicit gains made by crooks will be refunded to the last cent.
Had Malta, thanks to the vision of the PN, not become a member of the Eurozone, the Maltese lira would be worth a big ZERO, and Malta and the Maltese would be bankrupt.
Had Malta not become a member of the EU, thanks to the vision of the PN, Malta would have had to finance the Covid measures out of its own pockets.
Had Malta not benefitted from the EU circa Euro 1.2 billion every year, our deficit and our National Debt, would be double what it is.
Yet, the PL government and its Gahans still boast of the ‘fake’ Euro 8 million surplus in 2019, and refrain from mentioning in their media, these scary and worrying billions in National Debt and National deficit.
Yet, the Government hides the hundreds of millions of losses and debts of its Institutions and Agencies, like Air Malta, Enemalta, Brodcasting Authority, and others.
Yet, the corrupt Prime Minister, ministers, parliamentary secretaries and election candidates, keep bartering government employment and positions of trust for votes.
Where is the Governor of the Central Bank, who as Minister of Finance, was responsible for approving the spending spree ‘misappropriation’ of our hard earned taxes on public sector dormant employees, the hundreds of thousands paid to semi-literate bogan persons of trust and the millions gifted to Vitals/Steward on the Hospitals crooked deal for which he is undergoing criminal investigations, besides the obscene guarantees given the other crooked deal of Electrogas?
Where is the former crooked and corrupt Prime Minister Lord Egrant Joseph Muscat and his other crooked deal on the Mizura windfarm park with Montenegro, aided and abetted by the super crook Konrad Mizzi and overseen by the Godfather Keith Schembri who made the Cosa Nostra look ameturiship?
Finally, where is Captain Crook who acted as consultant to his predecessor on all projects mired in corruption?
These crooks will now boast of the fake increase in the GDP as a result of the factored contribution of these crooked measures and crooked deals.
I’VE BEEN SAYING FOR MONTHS THAT OUR DEBT WAS IN FREEFALL…HELLO GREECE!!!
.. and who is going to have to pay off this huge debt? We are of course!