The budget imposes on the private sector “as usual”, according to the Chamber

The Gibraltar Chamber of Commerce said the private sector would “as usual” be expected to pay more than most due to a budget that had missed opportunities to generate additional revenue and contained no economic stimulus package.

In a statement, the House said that despite earlier warnings about the need to rein in public sector spending and increase efficiency, there was little evidence this was happening.

“If government finances are in such a dire state, more drastic measures such as means testing and inflationary rent increases for government housing should have been considered,” the Chamber said.

“In his budget speech just after the EU referendum in 2016, the Chief Minister called on public servants ‘to be ready to do more, to go further, to work harder, to be more efficient and to wield greater influence than ever in shaping our shared future.”

“There is little evidence that this appeal has been heeded since then.”

“In short, the budget was a missed opportunity to plan for the future and bring the government’s finances back into balance.

“We will all have to pay for this but as usual it will be the private sector that will have to pay more than most, a private sector that has been hammered and is still struggling to recover from the effects of the pandemic and is already coping significant cost increases resulting from budgets over the past few years.

The House noted that the public deficit is expected to be £55.29m this year and £45.3m next year.

He said the government would borrow to fill this gap instead of seeking greater efficiency and cutting spending “which would be the most prudent and sensible approach”.

“No attempt has been made by the government to rein in its recurrent expenditure despite the sharp decline in revenue and the increase in debt,” the Chamber said.

“Alarmingly, he has announced that he is ready to borrow to continue giving civil servants pay rises when they are paid an average of 40% more than their British counterparts.”

“This stands in stark contrast to some private sector employees who will continue to face wage freezes.”

The Chamber said there was little transparency about the true state of the government’s finances or how much it directly owes or when government-owned businesses are included.

“That would have been a good starting point so that we could all be clear on the extent of the problem,” Chamber said.

The Chamber said changes to import duties would encourage more people to shop online or in Spain once again, as the flat 10% duty rate for personal imports had been dropped “to the detriment local businesses”.

He also said the £1,300 Covid-19 recovery levy on each business was “unreasonable and disproportionate”.

“Why should a small business with one or two employees pay the same amount as a business that employs several hundred?” It said.

“If such a charge were unavoidable, a fairer system would have been to make it scalable and therefore more affordable using the Societies Act definitions.”

And a day after the government announced it would reconsider the measure after receiving representations from financial services firms, the House drew a line in the sand and set the stage for another row.

“What absolutely must not happen is that only local trading companies are burdened with this burden and those that benefit from being incorporated in this jurisdiction but do not trade locally are exempted from it,” he said. declared.

“That would be a first-order inequity.”

The House said some of the increases announced in the budget were “understandable given the headwinds” described by the chief minister in his address.

These include increases in electricity and water, although the Chamber noted that significant increases in these services, other charges and social insurance had already been introduced last year. .

But he said many of the other increases amounted to stealth taxes in other forms.

Increases in license fees, registration fees, a tax on cruise passengers and a tax on tourism would all generate additional revenue if the collection mechanisms are robust enough.

But the House questioned how the government plans to collect the resort tax on Airbnb rentals that are unregulated, “thereby competing unfairly with established hotels”.

He said there was nothing in the budget that indicated ‘a semblance’ of a future financial plan for Gibraltar, and that apart from raising ‘the usual taxes’, few other measures to revenue increases were announced except for the Covid recovery fund.

The Chamber said the stamp duty had remained static for several years despite a booming property market and the government could have generated additional revenue without damaging confidence.

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