Oct 28 - Government “Taking Risks With High Spending” Says GSD
The GSD has today said that although the Chief Minister “can accuse the Leader of the Opposition of lying all he likes”, everyone will remember that in 2011 Mr Picardo was telling people that the GSD was “addicted to debt” and that there was “very little money in the kitty”. The party also says the now, in 2014, the Chief Minister “is spending money as if there is no tomorrow funded by huge direct and indirect public debt.”
Debt Rising
Daniel Feetham said “Whatever insults Mr Picardo throws my way are irrelevant. The figures do not lie. Net debt is the highest it has ever been at £354 million, Gross Debt stands at £450 million and the Government is using savers' money in the form of £430 million invested by the Gibraltar Savings Bank and the Government in Credit Finance Company Limited which, at some point, will need to be repaid to savers. That is a huge amount of debt taking into account the size of our economy. In addition cash reserves have shrunk by over half since March 2012 (see Government chart below) and recurrent expenditure has risen massively.
Risk
“It is foolhardy to be taking on such high levels of debt and spending money at the rate this Government is doing while our dependency on sectors and revenues such as gaming, tourism and tobacco are experiencing severe external pressure both from Spain and the United Kingdom.
Promised Inward Investment
“There is also an obvious lack of inward investment. To the extent that it is argued that the Sunborn is such investment, we simply do not agree that providing businesses with loans of over £30 million to invest in Gibraltar is an appropriate or sustainable business model.
Financial Services Contraction
“Another clear indication that the economy is not performing the way the Government tries to be portray it, is provided by the FSC Annual Report 2014. Pages 13 to 15 of that report sets out the authorisations in the various regulated activities in Gibraltar from 1 April 2013 to 31 March 2014. The number of licences surrendered was generally higher than the number of licenses granted. This also comes at a time when the banking sector in Gibraltar has been contracting and the smaller players in the local insurance industry facing Solvency 2 threat upon implementation of the relevant Directive in the future.
“In all these circumstances,” concluded Mr Feetham, “it is not surprising that the Opposition has been advocating prudence in Government management of our public finances, advice which the Government irresponsibly ignores at the peril of our future financial stability”.
