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GSD 'talks down economy' but ignores its past, CM says

The GSD was accused yesterday of repeatedly “talking down the economy” with “destructive” political criticism that was both baseless and damaging to the interests of the community.

In a four-hour response at the end of a four-day budget session, Chief Minister Fabian Picardo said the GSD had repeatedly attacked the government for channelling major capital projects through publicly-owned companies, even though that practice had been used by successive administrations for decades.

He cited examples of projects during the 16 years of GSD government that had been structured through government companies, adding that while the GSD had never filed accounts for those companies, his government had.

The bulk of his attack was centred on GSD MP Roy Clinton, who had described his budget as “a mirage” that parked debt “outside the book” in order to make Gibraltar’s public finances look better than they actually were.

In Mr Clinton’s analysis, if projects structured through government-owned companies were included in the budget book, Mr Picardo’s £85m surplus this year would turn into a deficit.

But the Chief Minister hit back and said that not only was “Clintonian economic theory” flawed, it was an attack not just on his government but on the legacy of the GSD under Sir Peter Caruana.

He said that over a period of eight years - including when GSD MP Daniel Feetham was a government minister - the GSD had spent £427m on capital projects, of which £278m was through the Improvement & Development Fund and laid out in the budget books, but £149m was through government-owned companies.

The implication was that by Mr Clinton’s logic, the surpluses reported by Sir Peter in that period would have, in fact, been deficits.

In 2011, for example, in the run-up to a general election, the GSD had reported a surplus of £32.9m.

But that same year, government-owned companies had spent £63.9m on capital projects, meaning that “by Mr Clinton’s standards”, Sir Peter had overseen a £31m budgetary deficit, Mr Picardo said.

“It’s wrong, it’s incorrect, but it’s the logic they apply to us,” Mr Picardo said.

And he added: “If their member from their Yacht Club does it, it’s fine, but if the boy from El Calpe does it, it’s disgraceful.”

“Why is it wrong if this government does exactly the same thing?”

For the third year running, the GSD voted against the budget, a move that Mr Picardo said effectively meant a vote against the delivery of services to the community.

The Chief Minister said Mr Clinton lacked the empathy to understand that the spending outlined in the budget book, prepared with input from officials across the civil service, was what paid for everything from healthcare and emergency services to public salaries.

The GSD, he said, had no regard for the economy or the impact of what it said, adding that they “impugn the integrity” of ministers and senior officials with unfounded “innuendo”.

"By raising the spectre or perception of impropriety when it is not there, or by raising the spectre of financial difficulty or impending bankruptcy, one can actually talk an economy down,” Mr Picardo said.

“Many recessions start in that way.”

And he added: "They're not just attacking me, they're attacking Gibraltar."

Mr Picardo said the GSLP/Liberals in Opposition had questioned GSD deals, “but we did not impugn the integrity of individuals”.

The Chief Minister countered criticism that the Victoria Keys had been allocated to a small group of individuals, reminding the Opposition that it had been the GSD that had allocated Coaling Island to that same group of investors.

Unlike the GSD, however, the GSLP/Liberals had negotiated a deal whereby part of the reclaimed land would be handed to the government, which would also own 20% of the development company.

He added too that the loan the government will provide to the developers of Victoria Keys will be fully secured, in contrast to deals such as the GSD’s £7m loan to OEM, which was unsecured and was lost for the taxpayer when the company went bust.

“The fat cats got fatter under them,” Mr Picardo said.

“With us, the few have to share with the many. With us, they have to share with the rest of the taxpayers.”

“For the first time in history, the taxpayer is going to get something from a development.”

And he dismissed too accusations that the government was opaque about public finances and what it was doing through publicly-owned companies.

“How can something that we are talking about…be said to be hidden?” He asked rhetorically.

“It’s not in the book, but it’s not hidden.”

He countered too GSD accusations that recurrent expenditure was increasing too much, contrasting the average annual 7% increases under his administration to the 17.8% average annual increase under the GSD.

The important thing, he added, was to keep recurrent expenditure below recurrent revenue and to bank the difference into rainy day funds, something which the GSLP/Liberals were doing but which the GSD had not.

He slammed the Opposition too - he excluded Independent MP Marlene Hassan Nahon from the bulk of his analysis - for not offering any alternatives to what they were criticising.

He said that while the GSD spoke about reining in spending, it did not say how it would do that.

The GSD had said the government needed to take “tough decisions” in order to ensure control over public finances.

“Seriously?” Mr Picardo said. “Every time I say no to anybody, they take the side of the people I’ve said no to.”

He also reminded the GSD that while in office, it had scrapped the Central Arrears Unit and allowed people to rack up debt to the government.

“How can they accuse us of encouraging the ‘a mi me pertenece culture’?” he said.

“They planted the seed and watered and covered it in their usual compost, and everyone knows what compost is made of.”

Although Mr Clinton was the focus of most of his reply, Mr Picardo had tough words too for Elliott Phillips, who he said had delivered “the weakest ever” budget contribution by a Leader of the Opposition.

It was “utterly abysmal” with “nothing of any substance”.

“He was saying to us that we must do all the things that we are doing,” the Chief Minister said.

Mr Phillips, for example, had accused the government of doing deals that benefited the rich minority.

“We build more affordable homes than they did, and we’re giving away to the rich?” Mr Picardo countered.

Mr Phillips had also spoken of a need to invest more in training for youngsters, particularly in the gaming industry.

But Mr Picardo replied: “Doesn’t he know that two gaming companies in Gibraltar already have CEOs who are Gibraltarian?”

And the Chief Minister scoffed too at claims that his administration was not transparent.

He said that since he took office, he had participated in 30 Direct Democracy programmes on GBC and had answered questions from the public without the protection of parliamentary privilege.

“That demonstrates our commitment to transparency," he said.

"I have never hidden away.”

And in a stinging remark, he said it had been GSD MP Daniel Feetham who had delivered a leaders’ speech during the budget debate.

“Titles mean nothing when it comes to leading the pack,” he said.

Mr Picardo said this year’s budget was "a prudent one" against the background of continued Brexit uncertainty, one that set the groundwork for future investment but was not loaded with pre-election giveaways.

He said that “of course” there was a need to keep recurrent expenditure under control, but added: “This nation deserves to congratulate itself, not talk itself down.”

“These estimates are a proper reflection of the grit and graft over the past year of everyone in our economy,” he said.

“Look at what all of us have done together. This is the work of everyone in our economy.”

The budget, which set out plans for £676m of spending, was approved at the end of yesterday's session with the backing of government ministers and Independent MP Marlene Hassan Nahon, with GSD MPs voting against.