2019 Budget Summary - Key Points
CONDENSED BUDGET
ECONOMY & PUBLIC FINANCES:
- The Chief Minister said the GDP forecast for the “turbulent and challenging” 2018/19 is £2.35 Billion. That shows an increase by £177.8m or 8.2% compared to 2017/18.
- Gibraltar’s GDP per capita for 2018/19 is forecast at $111,505 placing Gibraltar still in third position, closely ahead of Luxembourg which enjoys a GDP per capita for the year of $108,812.
- Net Public Debt is at £314 million or 13.38% of GDP in 2018/19. This is a decrease of about 1.3% from the 14.70% at which it stood the year before in 2017/18.
- Income Tax receipts were up by around £16.5 million and Company Tax receipts were up by around £33.5 million.
- Departmental expenditure: Mr Picardo reported an underspend in the Government departments of £5 million. The estimate for departmental expenditure in financial year 18/19 was £512m, but Government has instead spent £507m.
- Budget surplus stands in the Estimates Book at £82.8 million. This is a "record budget surplus" and final figures will be “closer to £85m.
- A total of £16.7m was refunded to taxpayers through its Refunds Program in the financial year 2018/19.
- Number of Gibraltarians unemployed is a new record low of 33.
MINIMUM WAGE AND SOCIAL INSURANCE:
- The minimum wage will go up 10% from £6.75 per hour to £7.50 over the next three financial years.
- This year, the minimum wage will rise by an “inflation busting” 3.9% to £7.00 per hour.
- With effect from 1st July 2019, taxpayers with assessable income of £11,450 or less will be brought out of the taxation system altogether and will pay no income tax.
- Taxpayers under the Allowance Based System will benefit from increases in their Personal Allowances.
- The Old Age pension will also increase in line with inflation
IMPORT DUTY AND UTILITIES:
- Electricity, water charges and General Rates payable by businesses will again not be increased this year.
- The Government will increase import duty by 3 pence per litre on fuels across the board as follows:
• Unleaded 95 from 35p per litre to 38p per litre.
• Unleaded 98 from 34p per litre to 37p per litre.
• Diesel from 37p per litre to 40p per litre.
• Diesel Premium from 34p per litre to 37p per litre.
Tobacco:
• Import duty per carton of 200 cigarettes will be increased by 50p to £14.50 per carton.
• Import duty on rolling tobacco will be increased by £5 per kilo to £65 per kilo.
HIGH STREET GOODS
As part of a “continued initiative to promote the competitiveness of local businesses” and in keeping with representations received from traders and the Chamber and Federation, commercial importations of the following goods will be reduced to 3%:
• Household vacuum cleaners.
• Household sewing machines.
• Electric toothbrushes.
• Electric shavers.
• Hair clippers.
• Hair removing appliances.
• Chargers used with telecommunication apparatus and automatic data machines such as mobile phone chargers.
• Table, floor, wall, window, ceiling or roof fans with an output not exceeding 125W.
• Furthermore, the import duty on musical and camera cases is reduced to 0%.
PLASTIC
The Government is introducing amendments to the Imports and Exports (Control) Regulations to restrict and prohibit the importation of certain single use plastic products into Gibraltar. In line with last year's increases, all single use plastic items not covered by the amended Regulations will now be subject to an import duty of 200%.
STUDENT GRANTS
As from September 2019, student grants will increase as follows :
- the grant for inner London increases from £ 6,939 to £ 7,500 per annum
- the grant for outer London increases from £ 5,640 to £ 6,100 per annum
PUBLIC SECTOR PAY
Public sector pay will go up by the rate of inflation, just shy of 2.1%. There will be no pay cap applied.
The sums that officers in the public sector would have collected if there had not been a pay cap applied to them last year amounts to in the region of £300,000.00. Chief Minister said that that amount is this year “easily affordable” given the surplus of approximately £85m. As a result, Treasury will include the relevant amount in the pay-packets of each relevant officers in September. Mr Picardo said: “There was no Brexit shock last year Mr Speaker and we do not need to deprive them of those sums this year.”
NEW INVESTMENT
The Government has attracted interest from a number of “very reputable investors” to develop investments in Gibraltar in the area of medicinal cannabis. The proposals include the research, development and production of medicinal cannabis products in “carefully monitored and regulated state of the art, environmentally advanced facilities.”
CONCLUSION
Mr Picardo ended:
“I know we have done the right things today. As we have every day of the past eight years. As we do everyday.
“We have done the things that matter. We have invested in the services that matter. And we have delivered to the people that matter. The people who work hard every day or whose days are so hard that they cannot even work.
“That is the aim of every one of our budgets. To deliver for working people. To deliver social justice. To ensure that those who can, are free and able to do. And that those that cannot are properly provided for.”
