Friday, September 27, 2019

Notes on how to analyse Government's surplus - Michael Briguglio

By the end of August 2019, #GovernmentFinance reported a #surplus of €83.9 million in the consolidated fund. This must be compared with Government's €250.8 million surplus as at end 2018 and  a deficit of €126 million as at the end of July 2019. 

When analysing such data w
e should be wary of partisan sloganeering, whether in the forms of triumphalism or doomsday prophecy. We should also be wary of snackable speedy reporting which reveals lack of understanding of budgetary processes and financial trends. Instead we should base our analyses of Government finance on social-scientific evidence. 

For example,
analysis of such figures should verify whether increased expenditure is discretionary or not and whether it is sustainable. It should look into whether revenue streams are making the country too dependent on certain sectors. 

It should also look into the mechanisms of financial streams which do not form part of the consolidated fund, such as the fund covering 70% of revenue from sale of passports . The other 30% appear under 'Fees of Office' in the Vote for Office of the Prime Minister in Consolidated Fund). 

In the meantime, #Budget2020 is approaching. I believe that the current positive financial outlook should encourage Government to adopt a #GreenNewDeal. More on this here.