Govt hits back at GSD over £300m ‘financing package’

The Gibraltar Government yesterday attacked the GSD’s “lack of understanding of public finance” following its criticism of the £300m “financing package” on government housing estates.

The government was responding after the GSD accused the government of a “disgraceful” lack of transparency over how it planned to spend what the Opposition describes as a £300m “mortgage” amounting to public debt.

In a statement, No.6 Convent Place said the financing package had been “…hailed as an excellent one by all professionals who understand the release of equity in otherwise dead government assets.”

It said the financing had been secured at record low interest rates, adding that the package was not a debt of Gibraltar, but rather “a structured liability” of the company that acquired the financing.

It said the GSD the criticism arose after the company, Gibraltar Capital Assets Ltd, had publicly filed its accounts.

Those accounts, No.6 added, reflected that GCA was acting properly and complying with legal rules.

“Mr Clinton is unconvincingly and duplicitously seeking to turn something positive into a negative and he knows it,” Chief Minister Fabian Picardo said.

“He is pretending that the minor increases in housing rents are somehow inextricably linked to the financing package. They are not.”

“They are part of the modelling only to show what effect they have in respect of the equity release, nothing more and nothing less.”

“This is another example of the GSD saying something out of sheer political expediency, with no regard for truth.”

Mr Picardo said the GSD had not only supported the minor increase in housing rents, it had actually said that they were “small and minor”.

It said the Leader of the Opposition had said as much, directly contradicting Mr Clinton's suggestion now that housing rent increases were necessary to pay for the financing costs of the equity release.

“It's not and he knows it,” Mr Picardo said.

“At least this represents another example of the inherent contradictions within the GSD itself. It's Phillips versus Clinton on this front.”

“In fact, the increases represent no more than about £80,000 to £90,000 pounds a year, making any suggestion that those amounts are 'necessary' in respect of the financing package rather ridiculous.”

“Mr Clinton should have worked it out for himself, given that he was an accountant before he retired.”

“Indeed, Mr Clinton admitted in an interview on GBC that the accounts complied with the law and provided 'all the technicolour details'.”

“That shows how transparent the Government actually is and denies the rest of his statement of any logic or legitimacy.”

The Chief Minister said Mr Clinton would never be satisfied with the information being provided as required by law.

“He will always say more is required, just because he says so,” Mr Picardo said.

“He ignores, of course, that the GSD borrowed using government companies and never even published the accounts of those companies as required by law, let alone provide additional information.”

“His is therefore an entirely hypocritical and entirely erroneous argument that people see through.”