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A MaltaMedia Daily Online News Service Special Feature
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The Budgets of the last few years |
The last four budgets were presented by three different administrations, as a result of two general elections in the space of two years in 1996 and 1998. The Budget for 1996 was presented by a Nationalist administration, the Budgets for 1997 and 1998 were presented by a Labour Administration, while the Budget for 1999 was once again presented by a new Nationalist administration.
The highlights of the previous Budgets reported below are taken from the official Budget Speech. Whether the promised were kept and the proposals implemented, that is another matter.
1996
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1997
Structural deficit
New term now being used: structural deficit. This is sometimes used to define a situation where ordinary revenue is not enough to cover recurrent (day-to-day) and capital (one-time) expenditure. However this term is more often used in conjunction with the much more worrying situation where ordinary revenue is not sufficient even to cover recurrent expenditure.
Action
Performance
Unemployment rate 4.4%
Deficit on current account of balance of payments was of Lm128 million (U$320 million). There was an increase of about 4.9% in GDP in 1996 compared with the previous year. There is a general consensus that the deficit problem is a serious one. However there are opposing views regarding the causes which have brought about such a situation. The Minister of Finance (1997) is quoted as saying that "Recurrent expenditure went up without being sustained by an adequate level of ordinary revenue. In the view of the Government, the previous administration had allowed recurrent expenditure to get out of hand without due attention to the need to have a concurrent increase in ordinary revenue. In the view of the opposition however, the identified shortfall in ordinary revenue is to be attributed to the distribution experienced in the initial implementation of VAT and in its subsequent abandonment and replacement by a less appropriate tax system."
Statements made for budget 1998:
Announcement of oil drilling project in Gozo.
Introduction of a small fee to get free medicines from the government dispensaries.
Substantial increase in water and electricity rates.
Increases in prices of cigarettes, petrol and kerosene
Privatisation plan.
Increase in weekly wage.
Unemployment rate 5.0%
Deficit on current account of balance of payments was down to 101 million. This owing to a reduction in the importation of industrial material and capital goods. There was an increase of about 6.7% in GDP in 1997 compared with the previous year.
1999
Statements made for budget 1999:
Drop in the income from tourism and social security contributions.
Increases in prices of cigarettes and of petrol.
Reduction in price of kerosene.
Reduction in water and electricity rates.
Reintroduction of VAT.
Rise to 9% of employee's wage as a social security contribution.
Increase in weekly wage.
Privatisation plan.
Unemployment rate 5.5%
Deficit projected at Lm135 million. Deficit on current account of balance of payments was of 37 million for the first nine months. There was an increase of about 8.5% in GDP in 1998 compared with the previous year.
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