Issue link: https://maltatoday.uberflip.com/i/1545966
9 maltatoday | SUNDAY • 26 JULY 2026 NEWS Central Bank flags agencies over increased government running costs GROWTH in government's dis- cretionary spending is harder to explain and is significantly driven by autonomous public agencies on which detailed information is lacking. This results from a recent anal- ysis of government spending car- ried out by Central Bank of Mal- ta economist Laura Bigeni. She called for more detailed informa- tion on the operations of govern- ment agencies, technically known as extra budgetary units (EBUs). The analysis, titled Decompos- ing The Largest Government Ex- penditure Items, was published as part of the Central Bank's CBM Staff Insights 14/2026. It was pre- pared by Bigeni, senior economist in the Fiscal Affairs and Reports Office within the Economic Anal- ysis Department of the CBM. The analysis says that while much of the increase in govern- ment expenditure is linked to clear policy objectives, growth in more "discretionary" types of spending, particularly daily run- ning costs, is harder to explain and is significantly driven by these autonomous units. To improve fiscal transparency, the Central Bank suggests more specific information on EBUs should be included in regular of- ficial publications such as the Eco- nomic Survey and the Half Yearly Report. What are EBUs? Extra budgetary units are sep- arate government entities that maintain their own accounts and own goods or assets in their own right. They have the authority to enter into contracts and incur li- abilities. While some may have their own revenue streams, they differ from other public sector in- stitutions because they do not sell their output at market prices for profit. Malta's EBUs cover a wide range of public services and regulato- ry functions. Examples include Infrastructure Malta, Transport Malta, the University of Malta, the Malta College of Arts, Science and Technology (MCAST), Was- teServ Malta Ltd and Malta En- terprise Corporation as well as all regulatory authorities. EBUs, together with central government ministries and local councils, account for the three largest categories of government expenditure: Compensation of employees, intermediate con- sumption, and social benefits. Together, these categories ac- counted for more than two-thirds of total government spending and around 29% of Malta's Gross Do- mestic Product (GDP) between 2022 and 2025. Sharp rise in daily running costs The fastest growth was recorded in daily running costs, technically known as intermediate consump- tion. This includes spending on services needed to provide pub- lic services such as healthcare and education. This category in- creased by 56.8% between 2022 and 2025, reaching more than €2 billion. EBUs and local councils accounted for around 36% of the annual increase between 2023 and 2025. Much of this spending re- lates to operational needs such as cleaning, security and consultancy services. Wage bill increases Government's total wage bill in- creased by 31.1% over the same period, reaching around €2.4 bil- lion in 2025. The increase was driven by high- er recruitment in health, educa- tion and public administration, as well as new collective agreements. The 2024 agreement for edu- cators had a significant impact due to substantial backdated pay- ments, while a 2025 agreement af- fected around 33,500 civil service employees. Growth in pensions and social support Spending on social benefits in- creased by 29.2%, reaching almost €1.99 billion in 2025. The in- crease was mainly driven by cash payments, particularly pensions. The number of people receiving the main retirement pension in- creased by around 2,000 annually, reaching nearly 64,000 by 2025. Other factors included higher student stipends and a new cost- of-living benefit for low-income households. Spending on unemployment benefits remained stable, reflect- ing record-low unemployment levels and reforms encouraging people to return to work. The Central Bank said that pro- viding more detail on the "discre- tionary" budgets of government agencies would help ensure a clearer understanding of Malta's public finances. JAMES DEBONO jdebono@mediatoday.com.mt Supermarket returns to Anton Camilleri's Fgura development A new planning application by AC Group seeks to build a super- market, retail outlets and apart- ments on a site known as Tax- Xemx u l-Qamar in Fgura. The application (PA 2122/26) is for part of a larger tract of land along Triq id-Dejma that was incorpo- rated into the development zone during the controversial 2006 ex- tension of development bounda- ries. Back in 2023, the Planning Au- thority's Executive Council ap- proved a zoning application for residential development on the site but excluded a supermarket because of traffic concerns. AC Group is owned by devel- oper Anton Camilleri, known as il-Franċiż. In 2025, Camilleri present- ed a new zoning application (PC/00025/25) seeking to "iden- tify and specifically delineate the zoning, square metreage and lo- cation for the planned supermar- ket development" on the site. But not to lose time, the devel- opers have now presented a full development application which already identifies the location and size of the proposed supermarket. The full development application still requires the approval of the second zoning application. The current application, which is still at an initial stage, fore- sees the development of a su- permarket, retail outlets, a gym, five basement parking levels and apartments. It was submitted by Matthew Camilleri on behalf of AC Group. PA had previously excluded supermarket The need for the new zoning ap- plication stems from a planning controversy involving an earlier zoning process approved by the Planning Authority's Executive Council in December 2023. At the time, the council ap- proved residential development on part of the site, community facilities on another section, and a mixed-use development front- ing Triq id-Dejma. Although a supermarket had originally been proposed as part of the mixed-use component, the Executive Coun- cil specifically agreed to remove it from the approved plans. Months later, however, it emerged that the council had er- roneously approved a plan that still referred to a supermarket on the site despite its decision to ex- clude it. Camilleri was informed of the error in a letter dated 6 May 2025. In it, the secretary of the Executive Council clarified that a corrected plan excluding the su- permarket had been approved by the minister on 7 April. However, in the meantime, on 11 April, Camilleri had already submitted a zoning application based on the previously approved erroneous plan. The Fgura local council had pre- viously objected to supermarket plans on another part of the same site when Lidl proposed a similar development in 2017. That appli- cation was eventually withdrawn. During the public hearing on Camilleri's earlier zoning applica- tion, the local council's architect noted that the relevant local plan policy did not identify the site as suitable for a supermarket. In response, Camilleri argued that a supermarket would bring significant benefits to residents by improving walkable access to essential services. However, the council warned that the area already suffers from heavy traf- fic congestion, especially during peak hours, and that a supermar- ket would further increase traffic. Following these concerns, the Ex- ecutive Chairman recommended removing the supermarket from the proposal. At that point, Camilleri's ar- chitect argued that the plan was only for a small neighbourhood supermarket and requested that its size be capped at 500sq.m. The supermarket being proposed now is more than double that size. Reporting by James Debono The site earmarked in red