Issue link: https://maltatoday.uberflip.com/i/1511356
IT seems that for some minis- tries and particular entities, the budget is a superfluous exercise. The way that last year's budget was completely disregarded by the Malta Tourism Authori- ty (MTA) and the Film Com- mission makes the responsible minister, Clayton Bartolo, the head of a financially irrespon- sible ministry where budgets approved by parliament are dis- regarded as if they were just un- important details. MTA has long been accused of financial mismanagement, having overspent its budget by almost €20 million in 2021 and finding itself singled out in a re- view of government expenditure during that year. The Film Com- mission, also under the aegis of Bartolo, overspent its budget by some €10 million for the current year. They seem to be Clayton's terrible twins! In the budget for next year, MTA has had its wings clipped for the first time in a decade, with the government cutting its allocation for 2024 by €9.5 mil- lion after it was one of the biggest winners throughout most of the budgets held over the past dec- ade. Its allocation rose from just €28.5 million in 2014 to €119.5 million in 2023, a staggering 320% increase. In spite of these increases, MTA kept spending more than was allocated to it in the budget. The increases were never enough for Clayton's boys! They wanted more concerts and more handouts. And Bartolo let them have what they wanted even though this meant ignoring the fact that MTA was on an over- spending spree galore. The min- ister simply waived off these concerns, calling the overspend- ing 'an investment'. MTA, for example, subsidises a number of live concerts every year. Details of how many of these concerts are subsidised by the MTA and how much is the subsidy for every event organ- ised in Malta are scarce. Most of these details are not in the pub- lic domain. So how this public money is actually being spent and how much it adds up to an- nually seems to be a state secret. Since the money spent is public money, it is absolutely wrong to keep these details under wraps. Moreover, this uncontrolled extravaganza has made the MTA budget a practically use- less exercise. Finance is con- cerned with the art and science of managing money and finan- cial discipline is paramount in running any organisation. Good financial management practice expects the authority to handle its finances in a way that allows it to be successful and compliant with regulations. In the case of MTA and the Film Commission, it does not seem to exist. At its core, financial manage- ment is the practice of making a business plan and then ensuring all departments stay on track. Solid financial management would enable whoever is respon- sible for finance in the MTA and the Film Commission to provide data that supports creation of a long-term vision, and take in- formed decisions on where to invest. One must also identify what needs to happen financially for both entities to achieve their short - and long - term goals. MTA ignores these principles and plods on with disregard to budgets and financial manage- ment. Both MTA and the Film Com- mission continually fail to ensure that they have enough money allocated to them to meet their obligations - they just rely on the Finance Ministry being always ready to foot the bill, whatever its amount and irrespective of what has been budgeted. More practically, I wonder whether MTA and the Film Commission have a serious fi- nancial manager responsible for activities and how these figure in planning, forecasting and con- trolling expenditures. Lack of fi- nancial discipline should not be the normal way of doing things, as seems to have been happening in these two bodies. The Ministry of Finance should have more clout to restrain this expenditure. Moreover, it should be obvi- ous that the MTA or the Film Commission themselves should not judge whether their over expenditure was necessary and justified. 'Nemo in propria causa judex' - no one should be a judge in his own cause. Early retirement Last Tuesday Times of Malta reported that one of the budget measures indicated that the Air Malta early retirement scheme is to cost some €92 million in 2024. This expenditure is the main reason for a €97 million increase in the budget allocated to the Prime Minister's Office. It also reported that a state- owned entity - RSSL Ltd. - has been tasked with the implemen- tation of Air Malta schemes. And RSSL Ltd falls under the aegis of the Office of the Prime Minister - rather than under the ministry responsible for Air Malta, which incidentally is actually the Min- istry of Finance! One wonders why this change was necessary. Incidentally, RSSL stands for Resource Support and Services Limited, a company that was set up in 2003 by the Gonzi admin- istration with the responsibility of labour recruitment and provi- sion of personnel - whatever that means. I suppose it really refers to the job of government seeing what to do with the employees when a state-owned entity is closed. Air Malta will be shut next March and a new airline launched to replace it - in spite of all the beautiful promises about its bright future made by Konrad Mizzi when he was the minister responsible for the airline. Instead, over the last two years Air Malta was slimmed down with employees who voluntari- ly resigned from their job being offered generous golden hand- shakes or being 'transferred' to the public service with the same pay. In the past, there were cases of people being re-employed by Air Malta after they were giv- en a golden handshake to leave voluntarily! This should not be allowed to happen again and for- mer Air Malta employees who are going to be re-employed by the new Air Malta should not be given any compensation for ear- ly retirement. It could well be that the 'new' job with the 'new' Air Malta will have less generous perks and/or a decrease in basic pay. In this case, the amount of the 'golden handshake' should be worked out in the light of reduced sala- ries and lost perks rather than on the basis of a job loss. Will the government do this? Or will existing Air Malta em- ployees be allowed to have the cake and eat it when they are re-employed by the 'new' Air Malta? 7 maltatoday | SUNDAY • 12 NOVEMBER 2023 OPINION Reining in Clayton's overspending Michael Falzon micfal45@gmail.com Clayton Bartolo heads a ministry where budgets approved by parliament are disregarded as if they were just unimportant details