Last Updated on Wednesday, 27 January, 2021 at 11:24 am by Andre Camilleri
Social protection remained the core function of government expenditure in 2019, representing 29.1% of total General Government expenditure, followed by General public services, Health and Education.
This news release presents data on the Classification of Functions of Government (COFOG), which is a commonly used methodology to examine the structure of government expenditure.
In 2019, total General Government expenditure increased by €414.1 million over 2018, amounting to €4,989.9 million. Apart from being the primary expenditure function amounting to €1,452.4 million, Social protection also registered the largest expenditure increase (€100.5 million). In particular, this reflects higher expenditure on social benefits (€37.7 million) and the extension of the St Vincent de Paul Long Term Care Facility for the elderly (€22.4 million).
Expenditure on General public services registered a rise of €88.3 million, the second largest increase over 2018, mainly as a result of an increase in gross capital formation (€25.0 million) and the new subsidy payment to the Malta Financial Services Authority of €22.9 million. This was followed by Education and Health, which both increased by €65.2 million. The increase in Education expenditure was mainly on account of higher compensation of employees (€22.5 million) and the provision of free school transport (€12.9 million), while the rise in Health expenditure was mainly attributable to higher wages and salaries (€30.1 million) and a larger outlay on medicines and surgical materials used for hospital services (€22.0 million). Expenditure on Environment protection increased by €38.0 million and amounted to €194.2 million. Almost all functions of General Government expenditure registered an increase, except for Recreation, culture and religion, which registered a slight decrease.
In 2019, the highest share of General Government expenditure was allocated to Social protection, which accounted for 29.1% of the total outlay. This was followed by General public services (15.0%), Health (14.7%), Education (14.2%) and Economic affairs (13.8%). Expenditure on Environment protection registered a share of 3.9%, while Public order and safety recorded a share of 3.4%. On the contrary, similar to 2018, expenditure on Housing and community amenities had the lowest share of total expenditure, followed by Defence, amounting to 1.1 and 1.9% respectively.
General public services as a share of total General Government expenditure registered an increase of 0.6 percentage points over 2018, which represented the highest increase. Decreases in the share of expenditure were noted mainly for Economic affairs and Social protection, down by 1.1 and 0.4 percentage points respectively.
In 2019, General Government expenditure as a percentage of GDP increased by 0.5 percentage points, to 37.1%.
Similar to the previous four years, when considering the components of General Government expenditure by function for 2019, a considerable share of government outlay was in the form of wages and salaries (29.6%), social benefits in cash or in kind (24.8%) and intermediate consumption (19.4%).
General Government expenditure by examining the second level function of the COFOG classification. The trend for 2019 remains consistent with that in previous years, considering that the largest share of government expenditure was spent on Old age (€910.7 million), which represented 62.7% of spending on Social protection and 18.3% of total General Government expenditure. This was followed by Hospital services (€492.9 million), which accounted for 67.1% of expenditure on Health. Also, a considerable share of government expenditure was recorded for Executive and legislative organs, financial, fiscal and external affairs (€348.2 million), followed by a total of €253.4 million and €227.2 million on Secondary education and Transport, respectively