The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

STATE Minister for Finance Michael Halkitis yesterday refuted media reports that the government has already blown past its forecasted deficit targets for 2015-2016.

Mr Halkitis criticised media outlets for writing “doom and gloom” articles about the government’s

finances during his contribution to the mid-year budget debate in the House of Assembly. 

He also denied reports that the government’s recurrent spending is up roughly $200m over the same period as last year – an indication that the government is exceeding its spending.

Mr Halkitis underscored that such reports were merely “knee jerk reactions” to the government’s mid-year budget presentation.

The Finance Minister noted that the government’s fiscal deficit at the “halfway point” of the fiscal year is “not absolute,” adding that there is time for the government to “catch up” and meet its full year targets. 

Regarding the government’s recurrent spending, Mr Halkitis said there is “no mystery” behind the figures presented recently in the House of Assembly as the government was merely moving expenditures that were previously classified as capital into recurrent (expenditure). 

Prime Minister Perry Christie unveiled the mid-year budget in the House of Assembly last week. He confirmed that the Government had incurred a $157m fiscal deficit for the six months to end-December 2015. 

He attributed the $157m deficit to “seasonality,” pointing out that the majority of the Government’s revenues are traditionally earned during the second half of its financial year, which coincides with a peak in economic activity related to the winter tourism cycle. 

However, Tribune Business suggested that Mr Christie’s revelations effectively confirmed that the Government has exceeded its full-year projections. 

Yesterday, Mr Halkitis said the figures were “not unusual” because the government’s revenue gain is typically “slower” at the beginning of the fiscal year. 

“At the beginning of the year, the revenue is lower, at the end of the year, because you have so much of your major revenue items collected in the second half, you catch up,” Mr Halkitis told parliamentarians yesterday. “Business license, commercial automobiles, property tax, bank fees, they all come in, heavily loaded at the second half of the year.

He added: “Last year it was the same thing. At our halfway point we were 95 per cent there, but you make it up. It’s not absolute. It doesn’t mean that okay you’re 95 per cent there and it continues to add because you catch up and last year we actually reduced it. And we expect to make our target this year. 

“But the difficulty here, Mr Speaker, is that two things happen. One, is this perception that bad news is being reported when in fact it is good news, good news for business. You talk to the bank and it’s good news for them to know that the public finances are improving. That’s good news, and we shouldn’t try to portray it as bad news or doom and gloom because it affects all of us.

“Not only us in here, it affects investment as well,” he said.