In its interim report for 2023, released on Tuesday, the Fiscal Council expressed concerns about rising government expenditure and warned that if it continued it could eat away at the budget surplus forecasted for this year.

According to the council’s estimates the unbudgeted expenditure by June 15 of this year was in the region €279m, based on the data it could collect. It noted that only spending that has been actually made by the treasury is recorded, whereas future spending that has been agreed is not accounted for. The implication was that there could be more expenditure that had not materialised.

This was not so much a criticism of the government as advice to show some caution and restraint on spending, as there were future spending obligations with cumulative upward pressure on public finance over the next few years. It cited the green transition, the digitalisation of the state, defence, energy security as well as the reform of the public sector and the judicial system as issues that would require substantial state spending in the coming years.

In these conditions the council believed it was necessary for the government to preserve its surpluses in order to ensure fiscal stability in the coming years. This was nothing original but just a call for good housekeeping, given the prevailing economic uncertainty. There was no high fiscal risk and the control exercised by the finance ministry did not raise any concerns at present, said the council.

Finance Minister Makis Keravnos, reassured on Wednesday that the economy was “on good track” and gave figures to support this. The fiscal balance for the first five months of this year was €344m compared to €140.8m for the corresponding period of 2022, while the rate of growth of state revenue was 15 per cent compared to the rate of growth of spending which was 9.7 per cent. While these are good figures, they do not negate the advice issued by the Fiscal Council, about the need for financial prudence given the future spending obligations.

The council also raised another point in its interim report that is never addressed by the politicians. It said there was no link between increased state spending and increased public benefit. As an example, it cited the increase in spending on the state sector which did not give rise to a more productive and efficient service that would be to the benefit of the public. It is a valid point that nobody has ever brought up. What benefit does the taxpayer have from a constantly increasing public payroll?

None, so how is the higher spending justified? Why is the taxpayer obliged to pick up a higher bill every year without seeing any improvement in the public service he is paying for? The Fiscal Council has raised a legitimate question, but we doubt the government will ever bother responding.