Below follows Marlene Hassan Nahon’s Budget response:

Dear Gibraltar. I would like to start this address by thanking each and every one of you for the support and understanding you have shown me in these difficult days. Despite cowardly accusations coming from certain  toxic quarters, me and my family have been consoled by the warm embrace of this generous and loving community, and we will be forever  grateful. 

I also want you all to know that we have been working hard outside  parliament to provide you with our own take on the state of the nation,  and to do so in a way that cuts through the spin and the protocol and  gives you an honest, straightforward and in-depth analysis of Gibraltar’s  current predicament and how we should get out of it. 

Much has been discussed about the adequacy and viability of the  figures in this budget. About the responsibility, or lack of, displayed by  the Government in using the resources of the community. Unfortunately,  I believe the problem is far more profound than whether this is the right  budget for Gibraltar or not. 

It has become clear to most of us right now that this government simply  cannot be trusted. By the same token we cannot trust this budget, or the  vast majority of figures it includes. 

Because if you can hide public debt in Government owned companies,  you can hide other expenses.  

If you claim to have rainy day funds and do not spend them in the  rainiest day of our history, your claims make no sense.  

If you introduce measures to increase revenue, yet still present budget  cuts in the most vital and downtrodden of all public services, our GHA,  your policies make no sense.  

If you introduce tax measures for companies designed to salvage  desperate public finances, only to remove them hours later, your  motives make no sense.  

If you introduce strange nuances to justify discrepancies in the figures  presented by different members of your Government, your arguments  make no sense.

When so many things don’t make sense, the explanation is normally  very simple. We are not being given the full picture. 

It would therefore be wise for all MPs and citizens of Gibraltar to assume  that, like in issues surrounding public debt, things are going to be much  tougher than projected in these estimates. We must all prepare for the  difficult times ahead of us. 

PUBLIC DEBT 

But we must guide ourselves by the figures we have, and even by those,  most likely sanitised parameters, our predicament is extremely worrying.  Firstly, we are in enormous levels of debt. We do not know exactly how  much debt -an already intolerable fact- but many estimate that public  debt is somewhere in between one and a half and 2 billion pounds. To  have an idea of how much debt is too much debt, there are some  studies we can look into: The world bank establishes a threshold of 77  percent public debt-to-GDP ratio. If debt is above this threshold, things  begin to spiral. Debt starts to become a drain on annual growth, costing  more to service than can be comfortably generated to pay back. This  undermines the confidence of markets in the capacity of nations to pay  their debts, bringing the cost of borrowing up even more. And so the  spiral begins.  

In small economies like Gibraltar, without the backing of powerful central  banks, this threshold is presumed to be much lower.  

Even though we don’t know for sure, everything points to the fact that  we have crossed that threshold, and that public debt is spiralling out of  control. How? Well in this last year, with our public finances already  overstretched from mismanagement and the costs of the Pandemic, the  Government spent 100 million more than had been budgeted.  

When you have no money, lots of debts, and you still manage to spend  more than you earn, there is only one way to describe the situation. Out  of control. 

The implications of this are simple.  

The more we owe, the more we need to pay back.  

The more interest we will pay if we need to borrow in the future. 

The less independent we will be in our economic and political affairs,  and crucially, the less we will have to spend on our healthcare,  education, and public sector. 

That is, of course, if we manage to pay it back. If we don’t, we would  enter a process of default, which would see us going cap-in-hand to the  motherland to ask for a bailout. This would be a national humiliation  which would decimate our reputation and destroy our private economy,  with most investors rushing out to greener, safer pastures. 

And you might think, she’s just exaggerating. She’s trying to gain  political points and of course she would, she’s an opposition MP! But  before you do remember this: We are already well on this path. In the  years since the pandemic, we have been able to borrow at an affordable  rate ONLY because the UK granted us the privilege of backing 500  million pounds of our debt with their economy. They stepped in to help  us because they knew, or we told them, that we would not be able to  borrow otherwise. We were already on the verge of collapse.  

REPUTATIONAL DAMAGE 

As for tanking our reputation, we have already seen this Government  allow us to be grey-listed by the financial action task force. As a  consequence of the we have also been added to the UK Treasury list of  high-risk third countries This decision will have enormous negative  effects for our financial sector and could have been avoided with a real,  adequately funded commitment to rules enforcement and transparency  throughout the sector. The Moneyval report, which was spun to be a  success, set out the roadmap clearly. The Government simply did not do  enough to stop this. To now hide behind regulators and conspiracy  theories is nothing but another attempt to spin their way out of their  incompetence. Or their dishonesty. Or both.  

It is important that the community understand where we are right now,  and who is at he helm of our affairs. Gibraltar is heading to a precipice,  and we are in the hands of a dangerous government which will do  anything to hold on to power.  

With a perfect storm of budget deficits, spiralling public debt, rampant  inflation, International grey-listing, an impending recession and the  growing threat of a no deal Brexit, there is a real and present danger  that the Gibraltar economy will collapse. 

While I hate to be the bearer of such disastrous news, it is important that  we stare at reality in the face and take the right steps to stop this  collapse. 

TAX INCREASES 

Notwithstanding the criticisms about the credibility of this budget, I  believe I have to give a measure of credit to the Government for the  revenue raising measures they have introduced in this budget. While  imperfect, many of these go in the right direction, even to the point of  challenging some of the economic myths that Mr Picardo and his  cronies have fought so hard to create. For the CM to backtrack so  dramatically on his recent rhetoric is a courageous thing to do, and I  commend him for it. He has broken away from an income tax system  that was extremely unfair and seemed set in stone. He has had the  cheek though, to refer to it as the “GSD taxation system” when he has  maintained it for over a decade and protected it tooth-and-nail whenever  questioned - until we reached the precipice of bankruptcy. He has even  gone as far as to talk about social justice in taxation, a term which I  assume he has taken out directly from my blog, which I know has many  avid readers in the Picardo-sphere. From there he has also taken heed  of our suggestion to tax the highest earners of our community in this  time of need. He has proposed, as we did, a sort of post-pandemic  consensus, in which we all chip in according to the old Marxist saying  “From each according to their ability, to each according to their needs”. 

Unfortunately not all the measures proposed are proportional and  progressive, as suggested by socialist maxims, or by the CM himself in  his appeal to social justice. Tax hikes to the highest earners are  significant, yet they have also been coupled with smaller hikes for lower  earners. The measures for companies, which he is already backtracking  on, are extremely unfair on small businesses who are already suffering  the effects of high inflation and negative consumer trends. I reiterate my  request to introduce ONLY progressive measures, taxing more to those  who can afford to contribute the most and protecting the needy in our  community. Care most also be placed to spare small businesses and the  middle classes as much as possible, even though the CM does well to  remind the Gibraltarians that fiscal pressure in Gibraltar is still  considerably lower than in the vast majority of comparable western  democracies. Unfortunately, he failed to remind us that the social safety  net for the private sector is not comparable to these other countries 

either, with workers in the private sector still enjoying a regime more akin  to developing nations than to our European counterparts. This is a  glaring injustice that, as soon as economic prospects allow, should be  addressed by our Government with courage and determination. 

OPPOSITION 

I also have to express my disappointment in the opposition’s arguments  against this budget. While we agree that there has been costly  mismanagement of our public affairs and “lavish spending” as they like  to put it, while we agree that vanity projects like VIP festivals and luxury  travel arrangements are both morally and economically reprehensible,  while we agree that there are inefficiencies in our civil service that need  urgent address, it is disingenuous to pretend that just with a bit of GSD 

style prudent management of our affairs we can solve all our problems.  Even if he is ultimately responsible for where we are financially, the CM  is right to say that the alternative to raising revenue is cutting costs, and  that would deepen the crisis and deprive a generation of Gibraltarians of  basic public services. The GSD needs to do some serious introspection,  and explain how they find themselves so often on the populist side of  the debate. On taxes. On the rights of the unvaccinated. On frontier  workers rights: I would like to, yet again, ask the LOTO, how exactly  does one use cross frontier workers as bargaining chips? Do we  threaten to not let them in? Do we show our muscle by depriving our  businesses of their workforce, our hospital of doctors and nurses and  our elderly homes of carers? How much of a persuasive argument does  he think we can make by shooting ourselves on both feet? 

The LOTO must understand that guaranteeing the rights of cross frontier  workers is as much a success for Gibraltar as it is for Spain, but he  believes that making the argument will favour his political interests. That  is not the way to provide the political alternative that Gibraltar  desperately needs. Gibraltar has suffered enough spin and manipulation  at the hands of this Government, and the parties in opposition need to  rise up to a moment that demands brutal honesty and complete  transparency. 

It is also extremely worrying that a member of the opposition would even  hint at overturning a referendum celebrated only a handful of months  ago, in a position that can only be described as cristo-fascist. If Keith  Azopardi wants to convince the Gibraltarian electorate that he can guide  Gibraltar through these difficult times, he must first prove that he can 

persuade his own party to pursue the progressive values he claims to  espouse. 

As opposition it is our job to criticise what is wrong but also to give credit  where credit is due, and to raise taxes to those who can afford to is the  right thing to do now, because the opposite would mean austerity,  degraded public services and an even greater downward economic  spiral. We hope this moment of reckoning is used to reflect profoundly  about the many systemic issues our economy faces, and to create a tax  system that finds a fair and efficient balance between drawing inward  investment and the CM’s new found appreciation of social justice. If we  go back to business as usual in 2 years, I am certain that sooner or later  we will find ourselves at the gates of doom again. Let’s use this  opportunity to make profound reforms that can guarantee the long term  sustainability of our economy and public finances. Let’s build a better  economic model that creates more value and breaks away from some of  our old habits. Let us make our civil service more modern and efficient,  demanding it provides a stronger backbone for our private sector. Let’s  do this while guaranteeing quality public employment, which is an  absolutely necessary tool at a time in which workers rights are being  constantly degraded by economic competition.  

I am not saying that these are easy endeavours, but they are worthwhile  ones, and I am convinced they can be carried out by sourcing the right  expertise and having the political courage to look to the future, and not  the past. 

GHA ON THE BRINK 

I sincerely hope that these measures have the desired impact and that  they bring an end to the austerity that is already happening in many of  our vital public services, however it beggars belief that, while the system  is still dealing with the medical aftermath of the Pandemic, we are still  seeing cuts affecting staff, equipment and consumables in the GHA. 

Six months into the Minister for Health announcing !landmark reforms”, the state of our healthcare continues to deteriorate. Any reboot of a  flailing healthcare system needs to be urgent and adequately funded if it  is to succeed, but this year the GHA has received yet another  devastating budget cut that will further erode the quality of our  healthcare, the morale of our workers, and will leave many in this  community feeling vulnerable and desperate. 

How on earth are we going to fix the mounting problems in the GHA with  a reduction in spending to the tune of 40 million pounds? Where is the  impact of the revenue raising measures brought in by the Government?  

People with healthcare issues cannot be expected to wait for months on  end to receive adequate support, and it is wholly unrealistic to expect  healthcare professionals to fix this emergency with shrinking resources. 

The most prominent issue is that of getting an appointment to see a GP  in a timely manner, if at all. In April we were told that !Key alterations have been made to the GHA"s telephone systems” and that and that the public could expect changes !in the coming weeks” to the way in which they interact with the Primary Care Centre appointment line.  

This is not the experience of hundreds of Gibraltarians who continue to  wrestle with the appointments system, nor is it what was expressed at  the recent GHA board presentation, where insufficient, lacklustre  reforms were promised “in the future.” 

The shortfalls of the telephone system means that people in need of  primary attention are being directed to A&E by the PCC reception when  they cannot get an appointment. As a result the GHA have pointed out  that 47% of A&E attendance is not urgent, with the GHA calling for  #responsible use". 

It is clear that a substantial proportion of this 47% are citizens who have  been let down by an inadequately resourced Primary Care response,  and that the problems cannot be fixed solely by shaming the public for  using A&E unnecessarily. We need a functioning appointment system  and sufficient resources in Primary care in order to stop desperate  patients seeking any form of medical attention from turning up at A&E. 

The !Landmark reforms” also mentioned a review of theatres and surgical waiting lists, the result of which is yet to be seen. Emergency  services continue to have disproportionate waiting times, and waiting  lists for secondary care such elective surgeries, outpatient  appointments, appointments with specialists and medical investigations  are at an all time high, with delays from the pandemic still putting extra  stress on surgical services. Reports from within indicate that staffing  across all departments is insufficient, with burnout increasing. Surgical 

wards are completely full, with low levels of permanent staff nurses  being filled by agency nursing.  

Inexplicably, we are not seeing similar cuts on staff at the top of the  organisation, a strategy which is clearly not delivering results. We have  new, imported top-tier positions within the GHA making enormous  salaries, often acting like PR agents for the Ministry. Staff is exhausted  and morale is low, and we still have a long way to go before economic  prospects improve. We need to levy resources for our healthcare, and  we need to, like most other western nations have done, increase  spending on healthcare UNTIL the GHA gets back on track. To do it  before will only make the problems snowball, and will come at at the  dramatic cost of preventable deaths and suffering. 

Maybe they see the new Xanit health facility and a move towards private  healthcare as the solution to the problems of our GHA. I wonder who  would benefit from that? Experience shows us that it certainly won’t be  the general public. 

NO TRACE OF ACCOUNTABILITY 

I’m sure the people of this community will step up to the occasion and  chip in to help Gibraltar in its time of need. We have always huddled  together whenever we have faced national challenges. All we ask is that  the Government STOP LYING TO US. Stop the spin. Stop the bullying of  dissidents. Stop peddling the absurd narrative that everything the  Government does is a success, and everything the opposition says is  ludicrous. The Government’s request that the community contribute  decisively to get us out of economic trouble should be cooled with a  commitment to usher in a new era honesty, transparency and  accountability.  

Fabian Picardo and his Government have to start taking responsibility  for their mistakes, their oversights and their active and wilful  wrongdoings. And accountability starts at home, with political  responsibility from the CM and his ministers. If you have done a bad job,  have some decency and political integrity and GO HOME. Let someone  else with ideas and integrity take on the job. Stop treating ministries like  your political party’s little employment office and start recruiting ministers  based on knowledge and expertise. Stop rewarding ridiculous  sycophants that distort the political debate pretending to be 

independents. Stop using the resources of the state to run a  propaganda machine. Stop funding rags that attack civil society, and  respect the people who run NGO’s and give of their time to help others.  Stop putting vital public services in the hands of incompetent minsters  who insist on running departments they do not understand. Stop  pretending you want to fight corruption when your crony-capitalist  machine is operating at full steam. And for God’s sake, tell your  speechwriters to do a bit of research on your literary references before  you make a fool of yourself in the biggest event of our democracy. 

Kipling’s “If” was written as advice to his son John, and was inspired by  the actions of Leander Starr Jameson against the South African  Republic. Jameson’s disastrous raid helped trigger the Second Boer  War that helped set South Africa on the path to apartheid.  

In recent years Kipling"s reputation has taken such a beating that it"s a wonder any sensible politician would want to go near him now. Kipling  has been variously labelled a colonialist, a jingoist, a racist, an anti Semite, a misogynist, a right-wing imperialist warmonger; all with  considerable substance. 

A bit of advice Mr Picardo, make sure your advisers don’t set you down  these embarrassing paths.  

BREXIT  

Another thing we have been doing ardently at TG is doing our bit to  protect the Brexit negotiations from attempts at populist point-scoring,  and this is something we are committed to continue doing until this  process is over. We have criticised Government in the past for creating a  toxic ultranationalist narrative around our relationship with Spain, and, to  a lesser extent, the EU. We believe this narrative, designed to  emotionally manipulate the electorate, will make it difficult to sell any  kind of deal - if we ever arrive to one. The Government has now  dramatically changed its tune regarding Spain and the EU over the last  year, but it would do well to revisit some of its past, manipulative rhetoric  if it is to undo some of the prejudices it has planted in the minds of  many. 

I believe Gibraltar has to be savvy about the situation we are in, and  understand that the vast majority of the people who have peddled these  aggressive narratives have never had any issues with having close ties 

to Spain, often jetting off to their mansions up the coast after taking part  in nationalist rallies. Gibraltar has to understand that a Brexit treaty is  absolutely necessary for Gibraltar right now, and have the confidence  that this Government is not going to trade an ounce of our sovereignty.  Despite my fraught relationship with the CM I have full confidence that,  despite the cynicism he has displayed in the past, he will not sell us to  the Spanish, as some deluded nationalists out there will have you  believe. I am 100% sure that the GSD also know that Gibraltarian  sovereignty is not a currency that any government would be willing to  commerce with. This issue is too important for populism. Too  transcendental for cheap manipulation.  

We need to support our Government at this crucial time, have a realistic  understanding of the position we are in, explain to the electorate the  implications of a no deal, and then have an open, honest debate about  the pros and cons of whatever deal eventually comes our way. No  heroes, no villains, no martyrs. Only careful, sensible pragmatism in a  spirit of good faith and solidarity. 

Government should start this process of honest analysis and pedagogy  now, and not try to use their usual PR tactics to steamroll a deal when it  is ready. We believe Gibraltar will make the right decision if treated  responsibly and maturely, but we are concerned about the prospect of  social unrest if this massive change is perceived to be imposed without  discussion. 

We wish the CM and his team of negotiators the best of luck for the  coming weeks and months, and ask that the community to continue to  view the possibility of a better, new relationship with the EU with faith  and optimism.  

CONCLUSION 

I would like to conclude by taking you back to the moment of reckoning I  described earlier. Your are back in that car that is heading straight for  the precipice. On the wheel is someone who tells us he is the only  person capable of driving this vehicle, while we see the cliff edge get  closer and closer.. His lack of judgment, as well as his unbreakable ties  to lobbies and interests make him completely incapable of lifting his foot  off the accelerator. He tells the people he has prepared alternative  solutions - jetpacks and wings that will pop out of the doors and wheels  of the vehicle that will guarantee us a safe landing, but everybody knows 

he is lying. He controls every statistic, every figure. He manipulates  those who try to scrutinise his work. He punishes those who speak out  against him. There is little to no independent oversight of what he does,  and he uses this control cunningly to ensure his survival.  

That is the real reason why this Government has to go. It is also the  reason why the accounts presented could have been cooked beyond  recognition, making all of these observations completely irrelevant. 

This Government did not handle our economy prudently, that much is  true. It is also true that this Government has presided over an enormous  increase in public spending to the benefit of many in this community. We  have new schools, new infrastructure, new affordable housing, more  grants for our students. A lot of the “careless” spending many refer to  has been poured into the welfare of our community, and that is  something we must recognise. 

The problem is as much an issue of prudence as it is an issue of  Chronic dishonesty, and of course, the systemic problems derived from  an economic model that is creaking at the seams. 

Dishonesty, because Fabian Picardo and his - as he himself described  them in his response - “merry men” cannot be trusted. They have  consistently lied about Gibraltar’s affairs, from the time they were in  opposition and throughout their tenure in Government. In the bad times,  of course, but also in the good. In doing so hey have brought Gibraltar’s  public finances to its knees, and they are now eroding our public  services to intolerable levels. Winds of privatisation are sweeping across  departments, and it has become almost impossible for our young to find  stable, good quality jobs. 

And the systemic issues is what they now describe as the “GSD taxation  system”. A system dependent on attracting high net worth individuals,  too often with questionable ties, selling them luxury homes and tax  avoidance schemes, and turning Gibraltar into a noisy, stressful and  polluted concrete jungle. A system that, until this year’s welcome  glimpse of social justice, has been permanently favouring a privileged  elite. They have done so ignoring that this system limits our possibilities  and does not allow us to transform our economy into something that can  face the future with confidence and optimism. They have tied us to  tobacco, fossil fuel bunkering and tax avoidance, and they have not 

spent the proceeds of these questionable, but very lucrative industries to  create new sustainable pillars for our economy and better opportunities  for our private sector. 

Now, in the midst of a global move to more financial transparency,  sanctions to Russian oligarchs, negotiations with the EU and a the  threats of a climate crisis, we face enormous pressures to transform our  economy.  

Unfortunately we no longer have the money to do so. 

We believe Gibraltar needs real, profound reforms to address these  issues, and we will make our ideas on how to do this available to the  public in the coming months. We believe this is a path that will take  several years, probably decades, but it has to start now. In the  meantime we cannot support this budget, as it would represent an  endorsement of the dishonest practices of this Government. We believe  the convention of voting to protect the salaries of public workers was  destroyed some years ago by a Government whose accounts simply  cannot be trusted. 

Thank you very much fo watching and have a happy and peaceful  summer.