The Gibraltar Government is expected to rein in spending and hike charges in a Budget statement today that will reflect caution in the wake of the Brexit vote.
This will be Chief Minister Fabian Picardo’s fifth budget and the first since the GSLP/Liberals’ 68% landslide election win last year.
But it comes against the backdrop of uncertainty after the UK voted to leave the European Union.
“We cannot bury our heads in the sand and pretend Brexit didn’t happen and the Budget will reflect that,” Mr Picardo said.
“At the same time, we have to be ready to attract new business to Gibraltar and to retain the businesses that are already here by continuing to offer the most attractive trading environment possible.”
“This is the most important Budget for a generation.”
The Chief Minister is expected to deliver an analysis in the Gibraltar Parliament of recent political developments in the UK and Europe and their impact on Gibraltar. In particular he will seek to reassure people on the issue of freedom of movement into and out of Gibraltar.
A government spokesman said Mr Picardo would report a “very positive economic performance” over the last financial year but that the Budget, which was delayed until after the result of the referendum was known, would also be “cautious” and take note of the Brexit result and the challenges this could present to Gibraltar.
In practical terms, that is likely to mean that some government charges “…will have to go up, especially in areas where these have been stagnant for some time,” the spokesman said.
“The government is expected to build in opportunities to rein in spending over the year if necessary as the full effects of the Brexit vote begin to be felt.”
The prospect of a cautious budget will almost certainly re-ignite the debate about public spending and debt, which dominated the campaign in the run-up to last year’s general election.
The GSD has vowed to stand united with the Gibraltar Government to help stave off any negative impact from the Brexit fallout, a commitment that will undoubtedly be reaffirmed today.
But the Opposition has also for years expressed concern about government spending and public debt, a position that intensified in the months ahead of the EU referendum.
Against that backdrop, GSD Leader Daniel Feetham will almost certainly call for a rethink on spending priorities during the course of the Budget debate today.
“Expect Daniel Feetham to tell Parliament that now is the time for consolidation and for reining in government expenditure and debt,” a GSD spokesman said.
“We’ve been saying that the government has been spending too much for years sand warning that there were many potential curves ahead, not least of them Brexit.”
Mr Feetham will also likely renew calls for an end to what he has in the past described as “the culture of entitlement and expectation” in Gibraltar, urging community-wide responsibility in the face of the challenges ahead.