The Gibraltar Chamber of Commerce has urged the Gibraltar Government to rein in public spending “even at the cost of popularity”.
In its annual report, the Chamber said it that it had long recommended that government take steps to reduce recurring expenditure.
But it said this was now even more important against the backdrop of falling revenue from tobacco.
The Chamber said the cost of some of the larger budgets such as the Gibraltar Health Authority and an expanding civil service were increasing by many times the rate of inflation.
“This may not be sustainable in an economy that has seen Government reduce its dependency on tobacco revenues,” the report said.
“All credit to [Chief Minister] Mr Picardo for introducing measures, which go a long way to establishing a sustainable economic model for the tobacco sector.”
“Sales from this sector had been allowed by the last GSD administration to grow out of control.”
“Mr Picardo’s tough stance is to be applauded but, as he knows too well, it comes at a significant cost to revenue.”
“Now it is necessary to reduce expectations and to limit government expenditure, even at the cost of popularity.”
The assessment was contained in the Chamber’s annual snapshot of local political developments.