23rd June 2015, 17:56
Gibraltar’s GDP per Capita is currently ranked third in the world, behind Qatar and Luxembourg. This according to the Chief Minister’s budget speech.
Over the course of two and a half hours, Fabian Picardo delivered his budget speech in parliament, announcing a budget surplus of £51 million, and a drop in Gross Public Debt to £448 million. The Chief Minister said this was a budget to improve the quality of life and standard of living for everyone, “for those who put their hands out to work”.
The annual budget session is one of the highlights of the political calendar, where both sides of the house debate Gibraltar’s finances and the state of the nation in general. This year the intensity is heightened by the fact that its election year – the Chief Minister has described this year’s budget as one for those who put their hands out to work, not those who put their hands out to receive.
Inflation stands at 1.8%, lower than the 2.75% average, and the forecast for GDP this year is £1.64 billion, representing 10.3% growth. GDP Per Capita is $83,544, that’s third on the world rankings behind Qatar and Luxembourg. Mr Picardo revealed that unemployment stood at 190, the lowest ever, with average earnings having risen from £23,500 in 2010 to just over £28,000 last year – a 19.8% increase.
Gross public debt stands at £448m, and is estimated to drop to £400 million by the end of the year, and cash reserves are £72 million. Mr Picardo said this year would produce another record budget surplus of £51.3million, and £30million would be put into Community Care for a total of £134 million investment since the GSLP Liberals took office.
Departmental expenditure is £7million over budget – 1.6% of the estimate. Mr Picardo praised his Govertment team and heads of department for real control of expenditure. He said the Gibraltar Savings Bank had received more deposits than ever – £1.1 billion in total. He said the prophets of doom – referring to the Opposition – weren’t even prophets in their own land.
Turning to Budget Measures, Mr Picardo announced a series of import duty reductions on Flooring and Carpets, products for the elderly, toys, hybrid cars, marine engines and suitcases. However, duty on rolling tobacco, 2 stroke bikes, wines beers and spirits, will be going up.
Income tax payable on the first £4000 goes down from 15 to 14%, whilst tax on the next £12,000 goes down from 18 to 17%, and all remaining tax goes down from 40 to 39%. There are a number of allowance increases on spouses and civil partners, single parent families, nurseries, children, house purchases, medical insurance, the disabled, the blind and senior citizens.
Mr Picardo announced Gibraltar’s first ever tax amnesty for those who haven’t yet declared income abroad. However, he said if people didn’t declare this interest in the next six months, there would be a 100% penalty. He also said there would be a name and shame system for companies who were in tax arrears.
The Chief Minister said civil servants and public sector workers would be receiving a pay increase of 2.75% a year, or the rate of inflation, whichever was highest. He committed himself to improving the terms and conditions of Prison Staff in line with the civil service, and to the creation of a new Gibraltar Police Federation.
Finally, the Chief Minister announced the minimum wage would be going up from £6.15 to £6.25, and that no-one earning less than £11,000 would be paying any income tax.
These are some of the other things Fabian Picardo said in his Budget speech:
-Gibraltar’s future is in Europe;
-Forecast GDP for 2014/2015 is £1.64 billion, equating to growth of 10.3%;
-We have achieved targets in three years that our opponents said we would not reach in four;
-By next year Gibraltar’s economy will be worth in excess of £1.65 billion, comfortably achieving prediction;
-Gibraltar continues to rank among the fastest growing economies in the world;
-The Rock’s Gross Domesitc Produce (GDP) per capita remains in third place out of 187 countries in the world – it was ranked 9th when the GSLP-Liberals took over office in 2011;
-Number of jobs in Gibraltar at a record high – 24,422;
-Number of Gibratlarians in full time and part time employment in 2014 was 10,991 – “more than ever”;
-Number of unemployed is just 190, but “We will not rest on our laurels as one Gibraltarian out of work is one too many”;
-Average annual earnings for 2014 above £28,000;
-Gross Public Debt on 31st March 2015 was £448 million;
-Our borrowing level is “low by international standards”;
-The Government is fully committed to reducing the level of national debt;
-The level of Gross Debt today is “considerably lower” than under the GSD administration;
-There was a 100% increase in net debt in just under one year, and 176% increase in net debt in two years, under the GSD administration;
-Gross debt when GSLP/Liberals came into office in late 2011 was 43.1% of GDP, compared to 27.3% today;
-“Debt is (now) decreasing and the economy is growing”;
-Budget surplus for last year exceeded estimated, a “staggeringly high” £51.3 million;
-Budget surplus is more than twice the size of the surplus ever declared by the GSD when in office;
-The Eastside development ‘Blue Water Gibraltar’ highlighted, while a Coaling Island reclamation project may be announced soon;
-LNG power station will be “entirely safe”;
-Aircraft movements and refuelling, and nuclear submarines, more dangerous than LNG facility;
-Inflation average is down to 1.8%;
-Inflation is expected to rise to 2% in 2016;