Mar 11 - Debt Continues To Hit Record Highs Says GSD
The Leader of the Opposition has today said that Government Net Debt continues to hit record highs. In addition, the GSD says “it is now clear beyond any argument that the Government is using Credit Finance Company Limited and the Gibraltar Savings Bank (“the GSB”) in order to fund its expenditure and projects.” As a consequence,says the Opposition, the combined debt of this community is around £800 million, which it says it “nearly twice as much as the amount the Government could legally borrow if it did so directly.” The GSD says that these “eye watering figures” are all the more remarkable given that in 2011 Mr Picardo claimed that the GSD was “addicted to debt”, when net debt was £240 million.
The GSD says that, according to answers provided in Parliament, Net Debt is nearly £400 million, “a new record for this community” and reserves are down to £52.8 million.
A statement from the party continued: “The simple fact of the matter is that the Government does not have the cash reserves or the ability to borrow directly in order to complete its manifesto commitments. Indeed, on the size of the economy as it is today, our net debt is already very close to the legal borrowing limit of around £440 million. In addition, the Government has only paid a fraction of what it will need to pay in respect of the works at Glacis, Laguna and Moorish Castle, the affordable homes and the small boats marina. It has also made no payments in respect of the construction of the new power station.
“That is the reason why the Government has resorted to hide part of the public debt by borrowing indirectly through the GSB. It will be recalled that £400 million of savers money has been transferred from the GSB to Credit Finance Company and despite assurances from the Chief Minister to the contrary, we now know that the money is undoubtedly being used to fund Government expenditure and projects. Not only is that money being used to pay the commuted pensions of civil servants and to provide loans to third parties but according to Minister Bossano £347 million has been paid to wholly owned Government companies (including GJBS) in order to meet their cash flow requirements.
“The Leader of the Opposition reminded the Chief Minister that in December of last year he agreed to participate in a GBC debate on the public finances with him. He said he looked forward to that debate.”
