Aug 10 - GSD: Gibraltar Has Borrowed More Than £1.1 Billion
The GSD says that the Government has admitted that the £300 million is additional borrowing structured through Government owned companies. The party says that this now takes Gibraltar’s debt, inclusive of the borrowings by Government owned companies, to “in excess of an eye watering £1.1 billion.”
A statement continued: “It is little comfort, when borrowing is needed because of too much spending to say that the terms of the borrowing is an incredible deal (interest rates have since dropped a ¼%): borrowings need interest paid and eventual repayment. If there is no necessity to borrow, a Government would not have companies that it owns borrow more for use in pursuing manifesto promises.
“The GSD Opposition has never criticised or sought to discredit any Government professionals or external advisers: there has been no mention of them. The responsibility for this borrowing lies with and the criticism is pointed at Government alone, in the end, the Chief Minister, Fabian Picardo. He should stop hiding behind professionals and external advisers, which is his trade mark when he wants to deflect criticism from himself.
“That there is a zero risk contradicts the legal realities of a mortgage: zero risk comes about only if the Government Company or Companies that have borrowed pay just like all borrowers. The revenue streams of these companies are unknown; most, in fact, are non-revenue making. So, if the Government has to fund the companies, then surely, the debts of Government owned companies should form part of the authorised public debt, which is the position in the UK.”
The Leader of the Opposition Danny Feetham said: “At the last election Mr. Picardo promised to reduce debt. This new £300 million borrowing increases the debt of Government and Government owned companies to over £1.1 billion. It is not an answer for Government to say ‘...that it does not become part of the Government’s useable reserves but of the cash pool of the Government companies ... nothing to do with the Government’s direct borrowing ...” In the end, this is money in the control of the Government that will apply it as it decides. The Government is right to say that there is a current climate of uncertainty. This is why caution is necessary. In the past, when Mr. Picardo used to say the GSD Government was addicted to debt, borrowings were much less and uncertainty negligible”.
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