The Chief Minister, in publishing the appropriation bill for 2022/3, disclosed certain financial information which is normally kept confidential until the Budget debate. Using only financial information that is now in the public domain, namely the Covid-19 Response Fund to 31 March 2022, and the details revealed by the Chief Minster, the GSD arrives at a very different analysis of financial performance for 2021/22
Shadow Minister for Public FinanceRoy Clinton MP stated the following:
“First of all let us consider the Chief Minister’s statement that the Budget deficit for 2021/22 is £55 million versus last year’s estimate of £51 million. This begs the question as to whether Sir Joe Bossano’s warning of a potential additional £40 million overspend was wrong?
“The answer is to be found in the Covid-19 Response Fund movements to 31 March 2022 that clearly shows it exceeded its 2021/22 budget by £67.5 million in supporting Government Revenue and expenditure.
“The Chief Minister gave the figure of net borrowing of £652 million after cash reserves of £120 million implying an aggregate debt of £ 772 million at 31 March 2022. The estimated aggregate debt for 2021/22 at 31 March 2022 was £722 million which already included provision for £50 million new borrowing. This means that the Government has had to borrow an additional £50 million (to £772 million) taking total new borrowing in 2021/22 to £100 million.
“This unbudgeted extra borrowing of £50 million is a number the Chief Minister has conveniently failed to highlight in his own press release and shows that the financial picture is far from that he is trying to pretend. The truer picture of the real deficit is in fact far worse than Sir Joe Bossano predicted when you consider the Covid-19 overspend of £67.5 million. Sir Joe of course was correct in pointing out that any Budget overspend would have to be met by more borrowing.
This is the stark reality of the financial position Gibraltar is in and I look forward to being able to debate this and the estimates for 2022/23 more fully in the forthcoming Budget debate.”