Government’s Consolidated Fund reported a deficit of €895.6 million in the first six months of 2020

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By the end of June 2020, recurrent revenue declined by €345.2 million and totalled €1,819.3 million. This represents a 15.9 per cent drop in comparison to the €2,164.5 million in revenue reported during the first six months of 2019.

Income Tax exhibited the largest decrease (€128.2 million). Additional drops were also witnessed under Value Added Tax (€86.5 million), Social Security (€58.6 million), Licences, Taxes and Fines (€54.4 million), Customs and Excise Duties (€35.4 million), Grants (€17.0 million), Rents (€8.4 million) and Reimbursements (€7.8 million).

Conversely, increases were reported under Miscellaneous Receipts (€32.0 million), Fees of Office (€15.0 million) and Dividends on Investment (€4.0 million).

Between January and June 2020, total expenditure amounted to €2,715.0 million, 17.0 per cent higher than the corresponding period in 2019.

During the period under review, recurrent expenditure totalled €2,235.0 million, €228.1 million higher than the €2,006.9 million reported during the first half of 2019. The main contributor to this increase was a €111.2 million rise reported under Programmes and Initiatives. Furthermore, increases in outlay were also registered by Contributions to Government Entities (€77.7 million), Operational and Maintenance Expenses (€26.4 million) and Personal Emoluments (€12.8 million). The main developments in the Programmes and Initiatives category involved added outlays towards Medicines and surgical materials (€43.6 million), Social security benefits (€43.3 million, of which €13.6 million were spent on social benefits related to COVID-19), Church schools (€20.8 million), Allocation in respect of local councils (€11.3 million), Extension of the school transport network (€6.0 million), Solid waste management strategy (€5.3 million), Street lighting (€4.9 million), Public service obligation for public transport, Compensation payments (both €4.7 million) and Feed-in-tariff (€4.3 million). In contrast, drops were recorded in Social security state contribution (€26.5 million, also reported as revenue) and EU own resources (€9.7 million).

The interest component of the public debt servicing costs totalled €93.1 million, a €1.1 million drop from the same period in 2019.

By the end of June 2020, capital spending of €386.9 million was recorded. This represents a rise of €167.4 million from 2019, largely due to additional spending towards Investment incentives (€138.0 million), which amounted to €162.0 million, including €154.0 million spent in relation to the COVID-19 Wage Supplement. Further increases were recorded in Property, plant and equipment (€28.1 million), Road construction and improvements (€10.5 million), Wasteserv Malta (€8.9 million), Maritime facilities and Improvements to museums and historical sites (both €3.5 million) and the EU Agricultural fund for rural development 2014-2020 (€3.4 million). On the other hand, there were drops reported under both the EU Structural (€13.1 million) and Cohesion (€12.7 million) funds 2014-2020.

The difference between total revenue and expenditure resulted in a deficit of €895.6 million being reported in the Government’s Consolidated Fund by the end of June 2020. This represented an increase in deficit of €739.5 million when compared to the deficit of €156.2 million witnessed during the same period in 2019. This difference mirrors an increase in total expenditure, consisting of recurrent expenditure (€228.1 million), interest (-€1.1 million) and capital expenditure (€167.4 million), in addition to a drop in recurrent revenue (€345.2 million).

Decreases in revenue and increases in expenditure reflect developments related to COVID-19.

By the end of June 2020, Central Government debt stood at €6,376.6 million, an €895.7 million rise from June 2019. Increases reported under Treasury Bills (€522.2 million) and Malta Government Stocks (€379.9 million) were the main reasons behind the rise in debt. Euro coins issued in the name of the Treasury contributed to a higher debt of €3.6 million. In contrast, lower debt was registered under the 62+ Malta Government Savings Bond (€2.9 million) and Foreign Loans (€0.1 million). Higher holdings by government funds in Malta Government Stocks also resulted in a decrease in debt of €7.0 million