GSD attacks ‘cowardly’ social insurance increase
The GSD has accused the Gibraltar Government of introducing cost increases ‘by stealth’ ahead of the annual Budget, in a “cowardly” move to avoid having to debate them in Parliament.
This follows the Government’s announcement last week on increases in social insurance contributions which, the GSD claims, will ‘undermine families and small businesses’.
As from April 1, 2017, the maximum payments for social insurance contributions will increase for both employers and Employees by 10%. For employers, that represents a rise to £36.50 from £32.97, while for employees it means a rise to £27.50 from £25.16.
In a statement GSD shadow minister for public finance, Roy Clinton, said: “In his 2016 Budget speech the Chief Minister stated that he would not increase social insurance contributions due to the seismic effect of Brexit and that he would observe the effects of the decision on business in Gibraltar before doing so and only if necessary.”
According to Mr Clinton the recently announced measures will cost employers on average an extra £183.56 per annum per employee and employees will take home £121.68 on average less per year.
Families and ordinary working people will be obviously worse off at a time when inflation is running at 2.5%, he said.
Mr Clinton also referred to comments made by the Mr Picardo in 2010, the last time social insurance was increased under then then GSD government.
The GSD noted that Mr Picardo had remarked at the time that ‘small businesses and employees across the board will feel the pinch’.
“I invite the Chief Minister to answer his own question in 2010, namely: ‘If we are running surpluses, if we are in such good shape ….tell us why it is that we need to further increase the cost of doing business in Gibraltar?’”
“The small business sector is still reeling from the recent unpopular increase in business licensing fees and red tape, this latest additional cost to small businesses is the last thing they need ahead of Brexit,” Mr Clinton added.
In his 2016 budget address, Mr Picardo had stated that the Gibraltar Government planned a total reform of the entire structure of the Social Insurance Fund in order to place it on a ‘viable footing’.
“For now, given the seismic effect that the Brexit decision has had on financial markets and on business, after very careful consideration and after detailed consultation with Unite the Union, the Federation of Small Businesses and the Chamber of Commerce, the Government will not increase social insurance contributions,” the Chief Minister said at the time.
Mr Picardo further stated that the government would observe the effects of the Brexit decision on business in Gibraltar and would if necessary make the necessary increases at the beginning of the calendar year 2017.