In the first eleven months of 2021 Government revenue reached a record high of €4,539 million, or €150 million more than pre-pandemic revenue.
This happened despite that Government cut the stamp duty rate and the excise duty on fuel, gave higher income tax refunds to all workers and tax holidays on licenses and rents to operators affected by the pandemic.
In fact, licenses, rent and customs revenues decreased by around €100 million, compared to before the pandemic.
In contrast, income tax revenue reached a record €1,639 million or €167 million more than 2019. At the same time, social security revenue amounted to €985 million, an increase of €85 million on the level before the outbreak of COVID-19.
The fact that these two sources of revenue have shown such a strong improvement is the best evidence that jobs and incomes have not only been protected but have continued to improve.
This also is evidenced by the fact that VAT revenues reached a record figure of €923 million, an improvement of €18 million on the level before the pandemic. This shows how despite restrictions, private consumption has maintained a very good level, that compares well to that in 2019.
Despite restrictions, private consumption has maintained a very good level, that compares well to that in 2019.
It should be recalled that in his reply to the Budget, Opposition Leader Bernard Grech had said that the Government’s prediction that revenues would exceed those of 2019 was an example of virtual reality.
Opposition finance spokespersons also said the Government cannot meet its financial targets, and argued its economic assumptions were fallacious. The facts show how far the Opposition is from having a clue on how to run an economy.
The Opposition’s argument that the Government is over-spending is a confirmation that if in power it would have embraced the same austere policies that had led to so much unemployment, burdens and economic weakness after the 2008 financial crisis.
Instead, Labour has invested and spent a record amount of €5,661 million, or almost €1,300 million more than in 2019. Government capital expenditure is one third more than before the pandemic. Outlays on health, education and social services have also reached unprecedented levels.
Although the Government spent almost €600 million more than 2020, by November the deficit had improved by €212 million, or by 16% when compared to 2020.
Once again this shows how the Opposition’s criticism on the running of public finances does not hold any water and is fundamentally flawed.