Oct 07 - 'Smoke and Mirror Economics' - Says GSD on Government Debentures
Raising the matter of Debentures, the GSD has today noted the Government’s recent move to send notices to certain debentures holders ‘informing them that it had decided to redeem their debentures and offering them the opportunity of investing the money in the Gibraltar Savings Bank (“GSB”).’
The Opposition has said that in just over two years, ‘the Government has embarked on a vast and unprecedented spending spree. Public debt during this period has consequently increased. The net public debt is the highest it has been in history at £354m, while gross public debt was up from the year before to £450m.’
The party insists that debentures issued directly by the Government of Gibraltar count towards the gross public debt level, whilst debentures issued by the GSB do not count towards the gross public debt level.
They go on to say that the latest move by the Government is ‘an artificial attempt to reduce public debt by shifting that debt to the GSB.’
The Leader of the Opposition explained, ‘It is smoke and mirror economics. Public debt goes down while the money available to the Government for spending increases because it is borrowing savers’ money from the GSB.’
