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CM to deliver budget with ‘no room for giveaways’ as Covid hits public finances

Photo by Johnny Bugeja.

Chief Minister Fabian Picardo is expected to deliver a conservative budget today in which there will be ‘no room for give-aways’.

The budget comes against the backdrop of an economy dented by the impact of the Covid-19 pandemic and as new coronavirus cases rise even as Gibraltar edges out of the restrictions that have defined the past 18 months.

The budget comes too as the European Commission is poised to publish its negotiating mandate for forthcoming talks for a UK/EU treaty on Gibraltar’s future relations with the bloc.

The document, which could be published as soon as today but must still be approved by the European Council, represents only a starting point to negotiations and is likely to include positions that will be unpalatable to Gibraltar and the UK.

Mr Picardo has previously warned that the mandate will likely be ‘less than helpful’ but that the negotiations must be measured by the final agreement, not the opening gambits.

The budget session this week will also renew longstanding Opposition concerns about the GSLP/Liberals’ handling of public finances and debt.

Alongside criticism of many areas of government spending, the Opposition has repeatedly voiced concerns that the numbers and economic data published by the government do not reflect the true state of public finances.

The is the first normal budget since 2019, with the Gibraltar Parliament having extended the 2019 budget last year as it also approved emergency spending to enable Gibraltar to prepare for the impact of Covid-19.

Even before the session today, the Gibraltar Government had already announced that it would report a deficit of £158m and project a further deficit next year of £50m.

Some measures to boost government revenues have already been announced to lukewarm response, including a hike to voluntary contributions and an increase to Social Insurance payments that the Opposition has said will prove crippling to some.

While there will be few if any freebies in today’s budgets, the Chief Minister is expected to want to add to benefits and allowances available to the disabled and those who care for persons with disabilities.

The Government is also expected to continue to increase the Old Age Pension, as it has done every year since the GSLP/Liberals were elected.

The minimum wage is also expected to go up to £7.50 as the law was changed in 2019 to provide for a five-year escalator.

The chief Minister has yet to respond, however, to representations made by the Chamber of Commerce and the Federation of Small Businesses to freeze the increases.

The budget session starts in parliament at 10.30am.

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