Feb 02 - “The Chief Minister Caught Out Again” Says GSD
The GSD has today repeated its concerns about the huge increases in net public debt and the way the Government is “using the Gibraltar Savings Bank to fund Government expenditure and projects despite assurances by the Chief Minister in his New Year Message that not one penny of monies from Credit Finance is being used to fund Government projects or expenditure.”
The truth is, says the GSD, that Net Debt continues to break records and is now the highest it has ever been in our history at £392 million. That is up from a then record of £354 million during the Budget in June and up from £217 million when the GSD delivered its final budget in 2011. According to the latest information provided to Parliament by Minister Bossano, the legal borrowing limit stands at £443 million. In other words, says the Opposition, the Government can only borrow another £51 million. Reserves, it says, stand at £60 million.
The effect of this is, argues the party, that the Government “simply does not have the money or the ability to borrow within legal limits to pay for its capital project commitments directly.” The power station alone, according to the Government will cost the tax payer £77 million; all affordable homes will cost in excess of £100 million, the berths will cost £24 million and the cladding to three estates will come in at nearly £100 million. How, asks the GSD, will the Government pay for all this?
The GSD reminds the public that, as the Leader of the Opposition has said on numerous occasions, the only answer can be that the Government will use the £400 million transferred from the Gibraltar Savings Bank into Credit Finance Company. The majority of that money has now also been transferred from Credit Finance Company to Gibraltar Investments (Holdings) Limited, which is the company all Governments use to finance Government companies and their projects. In the last session of Parliament on Thursday, says the GSD, Mr Bossano also accepted that this had been done to fund those companies’ ‘cash flow requirements’. Those companies include, for example, GJBS, which is building Government affordable homes and undertaking the cladding works at the three estates.
A party spokesman said: “Once again the Chief Minister has misled the people of Gibraltar by promising that no savers’ monies from the Gibraltar Savings Bank or Credit Finance Company was being used to fund Government projects or expenditure. This is not true and just as the Leader of the Opposition predicted in his New Year Message, a large part of the money still left in Credit Finance Company (some £347 million) is being used to fund Government companies, which includes those involved in projects. Effectively Government is borrowing indirectly through the GSB what it could not borrow directly because the legal borrowing limits would not allow them to and on the pretence that it does not count as Government debt. That is unprecedented and very dangerous for this community.”
