Azopardi points to ‘annual Budget fiction’ filled with overspends, erosion of wages and unrealistic forecasts

The Leader of the Opposition, Keith Azopardi, called the budget a “an annual fiction or a systemic failure” as he highlighted departmental overspends, the slow erosion of wages and unrealistic forecasts.

Mr Azopardi delivered his budget address on Monday evening and hit out at the Government’s handling of public finances, telling the House the GSD will again vote against the Chief Minister’s budget again this year.

The Opposition leader was blunt when summing up the Government’s budget, calling it “an opaque fiction” that masquerades the true state of Gibraltar’s public finances.

“The opaqueness continues because we continue to have a parallel Government with a parallel Treasury and a parallel Chief Minister and a parallel Finance Minister,” Mr Azopardi said.

He said the Minister for Economic Development, Sir Joe Bossano, “dips in and decides” how to use millions of savers’ money as his own treasury without real accountability.

Mr Azopardi pointed to developments such as the £38m elderly residential facility at the Rooke site and the Victoria Stadium project.

“All under the guise that is part of the National Economic Plan that is more opaque than the structuring itself,” he said.

In terms of public finances, Mr Azopardi said the Government has been “saved” by a higher corporate tax rate, which will yield around £230m, adding the Government would otherwise have been unable to balance the books.

“There’s no magic and they ain’t gurus,” Mr Azopardi said.

In his view, people and companies are bailing out the Government year after year. Withouth them, he said, the finances would be in deep red.

Mr Azopardi pointed to a £66m departmental overspend and a recurrent history of overspend in previous budgets, adding that the Government is lucky not to have a deficit.

“It’s a pattern they can’t keep to their budget,” he said.

Mr Azopardi called the budget an “annual fiction or a systemic failure” and “rosier than real”, adding said efforts had been made to masquerade the real state of public finances and spending.

He said the Government was using millions of taxpayers’ money and “whatever they decide in the moment”, and with a significant level of debt before Covid, there have been no efforts of downsizing the debt.

Mr Azopardi said the GSLP/Liberal Government had “massively ratcheted up the debt”, adding there is more “off book than on book” and the Government’s legacy will be unprecedented debt.

Looking at the estimates book, he said, the Government has repeatedly under projected in its forecasts and its figures are unrealistic.

TREATY

Mr Azopardi described how his party has cautiously welcomed the political agreement for a treaty on Gibraltar’s future relationship with the EU.

He noted nine years had passed since the Brexit referendum and that he looked forward to “an honest debate” when the treaty text is finalised.

Mr Azopardi said his party will exercise careful judgement, but that this does not mean the party is “somehow lurking behind the door of Parliament with an axe”.

When the treaty text is completed, it is expected to be debated in Parliament and Mr Azopardi called for “a coherent debate without spin”, adding his party wants a safe and beneficial agreement.

He asked the Government for clarity on why negotiating positions had changed and why the Chief Minister was delivering a treaty that did not include Frontex officers, but rather Spanish officers, and when an explanatory booklet of the treaty would be given to the public.

“The reality here is that we are in a situation where we are dealing with a Government that is a moving feast when you ask them for explanations on different things,” Mr Azopardi said.

Mr Azopardi pointed out what he said were inconsistencies in Mr Picardo’s previous statements regarding details of the agreement.

“This is the problem, Madam Speaker, that we don’t get straight answers,” he said.

The GSD recognises that the current status quo could not continue and, coupled with emerging events internationally, Gibraltar’s move closer to the EU can bolster the sustainability of the community while retaining a close relationship with the UK

For Mr Azopardi, it is important that the GSD has enough time to assess the treaty text once it is concluded.
Until then the party will suspend its judgment.

“We want to see that text and make our minds up,” Mr Azopardi said.

PUBLIC FINANCES

Mr Azopardi noted how forecast figures in the budget are projected to spend less than previously, questioning whether this is realistic.

“I would say they are on the wrong side of history on the figures at those points,” he said.

Mr Azopardi also hit out at the “chaotic” LifeCome Care contract for domiciliary care services.

He said £3.8m of taxpayer funds was invested and he called this a gross mismanagement and a complete collapse which ended with the Government terminating the contract.

He said the Government went into “rescue mode” and bypassed the usual procurement processes to award another multi-million contract, but that he nonetheless welcomed the establishment of Community Care domiciliary Care Services Ltd.

The budget has seen no changes on personal income tax or business tax this year, as the Government awaits the ratification of the treaty and introduction of transaction tax.

“The fact that there's been no change on personal income tax rates or corporate tax likely ameliorates what in general terms is still a budget that for many people produces nothing to stem the erosion of wages and cost of living,” he said.

“For example, some private sector workers will have the benefit of the increase in the minimum wage, other private sector workers face continuing erosion of wages with no real relief in terms of other costs or tax.”

“Public sector workers have had no increase in salaries in almost six years.”

“We welcome the replacement of the 2023 electoral cash handouts with a more and less cynical conventional salary rise for public sector workers.”

Mr Azopardi said cumulatively people are worse off and that instead of reducing debt, Mr Picardo’s Government has quadrupled debt, therefore, “making Gibraltar less safe and more vulnerable”.

He said Gibraltar deserves a better way of handling public finances.

“This is a Gibraltar where there is a growing litany, Madam speaker, of serious financial and governance deficits,” he said.

“A catalogue now of waste and abuse, of financial abuse and democratic abuse, where there is concerted effort to hide those uncomfortable truths, but inexorably they are emerging.”

PRINICPAL AUDITOR’S REPORT

The six-year delay of publication of the Prinicpal Auditor’s Report is politically manufactured by the Government, Mr Azopardi said, adding that this allows the Government to deny accountability.

“We are now six years away with a massive time lag,” Mr Azopardi said.

He said it is “obvious” that through a mechanism of delay the GSLP had denied accountability.

“As clear as day, the Government, the GSLP Government, have cottoned on to a technique to delay the work of the Principal Auditor to deny the people of Gibraltar accountability untill years after the event,” he said.

Mr Azopardi said the public will find learn of “financial concerns and financial abuses long after the GSLP leave office.”

He also called the Chief Minister’s comments on fellow GSD MP Roy Clinton “a desperate political attack”.

The comments regarded the repayment of the £500m Covid debt.

He said Mr Clinton had expressed concern and was not calling for the Covid debt repayments to be fixed during a time of high interest rates, as the Chief Minister had claimed.

Moving on to the public inquiry into the retirement of former Police Commissioner Ian McGrail, Mr Azopardi said it had shone a bright light on Gibraltar and had been “shocking”.

He said in raising the cost of the process, Mr Picardo, a core participant in the inquiry, was trying to change the focus to money rather than future findings.

“This is an important moment for this community because this morning the Chief Minister focused his contribution on the MaGrail inquiry, on seeking to undermine it in people minds because of the cost,” Mr Azopardi said.

“There may be people who were listening to that, who might think the cost was high, but might think he was trying a bit too hard as a core participant within the scope of the inquiry, accused of misconduct by participants in the inquiry, to try to turn the focus on money rather than on the serious scandalising issues that emerged in the inquiry.”

“There would be people who might think he was trying too hard.”

“I suspect that those comments will not stand the test of time and that the real focus will be whatever the report says.”
Mr Azopardi also touched upon parliamentary reform in his budget address.

“The institution needs to be better protected and better assured by lasting reforms,” he said.

He added parliament is an important watchdog and check on the power of government institutionally, and he believes that “parliament can work better”.