Comments on: Oh, for crying out loud

By: Leo Said

Leo Said — Fri, 23 Jan 2009 12:41:24 +0000

@ David S

Indeed, flimkien kollox possibli.

p.s.: Did government procure Herceptin directly from foreign manufacturer?

By: David S

David S — Fri, 23 Jan 2009 10:23:55 +0000

The way it works is that for example government will purchase one million euros of Herceptin in 2009 without increasing the budget for the procurement of pharmaceuticals. So it will run out of budget in 2009 earlier than it did in 2008, which means the total outstanding as at 31st December 2009 will be even greater than Euro 30 million – and it gets worse every year, until election year when extra budget is allocated.

The same happens with projects etc, and this is what causes finances to go haywire in election year, to appease contractors. The problem is that government does not work on accrual accounting so we never have an exact figure for the budget deficit. All you do is defer payment to the following year.

By: Leo Said

Leo Said — Thu, 22 Jan 2009 12:53:20 +0000

[The point is the government adds for example free Herceptin, but does not add budget to buy it.]

@ david s

Where, and how, did government obtain Herceptin? Did government pay in “flus kontanti” for Herceptin?

By: Leo Said

Leo Said — Thu, 22 Jan 2009 12:48:50 +0000

@ Christian

[On the other hand, if the government has no money at all, then we have a huge problem.]

It is better to wake up late (as your good self has just done) than never.

By: Ivan M. Dingli

Ivan M. Dingli — Thu, 22 Jan 2009 08:42:45 +0000

Daphne, I agree with you regards the private sector; I’m in the same situation.

Personally if I work with private companies whom in my view might be problematic in regards to settlement of pending invoices, I tend to allocate that extra charge within the workings prior to the issue of quotes/invoices. With Government departments it’s completely different especially since in their public tenders they write in bold ‘cheapest compliant offer will be given preference’ and they mean it even if it is at the expense of quality.

P.S. On another note, Daphne did you send your best wishes to Joseph for his birthday?

[Daphne – You mean he’s advertising his birthday? What is he – 35 again?]

By: Ivan M. Dingli

Ivan M. Dingli — Thu, 22 Jan 2009 08:27:20 +0000

The problem is that if the Government issues a purchase order to acquire goods/services, they must allocate the budget and tie it up with the relative PO.

Standard payment terms with government entities are always in the region of 60 – 90 days which is already a burden on suppliers.

[Daphne – Payment terms in the private sector are no different. I would say they’re worse. I have invoices outstanding for payment which are a year old this month.]

By: david s

david s — Thu, 22 Jan 2009 06:47:00 +0000

In my view there is some misreporting here. Whether Dalli said or meant to say he is negotiating with the Finance Ministry to give him more “money” or more “budget”. The point at issue is not whether he pays in “flus kontanti” . The point is the government adds for example free Herceptin, but does not add budget to buy it. Admittedly there is also significant wastage in patients collecting ‘free’ medicines and not using them, and Dalli did dwell on the issue of entitlement.

What baffles me is that in reality the cash-flow shortfall is a mere Euro 15 million (Lm6.5million) and the debt period is cut from 180 days to 90 days. Eur 30 million would mean cash on delivery which is obviously not being requested.

By: Christian

Christian — Thu, 22 Jan 2009 01:23:43 +0000

This only means one thing, that the government does not have any money at all, or all the money is allocated to other purchases or projects already. If this money was allocated, then ‘negotiate’ was the right word used. ‘Negotiate’ to transfer some money from other projects, to these over-due payments (not actual money). On the other hand, if the government has no money at all, then we have a huge problem. When private companies are in the latter position, then they either borrow money, which is getting more difficult every day, sell some of their assets, cut other costs or file for bankruptcy. I think someone here should put their hand up and let these suppliers know what the real situation is, and draw up a plan. At least they are owed that.