Gibraltar’s public sector is unsustainable in its current form “even without Brexit”, Sir Joe Bossano, the Minister for Economic Development and Public Sector Efficiency, told Parliament.
Speaking during the budget debate, Mr Bossano said the public sector had grown consistently for many years under different administrations but that given the uncertainty ahead, “things will have to change”.
Not only that, but there is a need too to ensure greater efficiency across the public service to deliver improved value for money and service for the same or less cost.
“Controlling Officers have a duty to keep their departments within budget,” he said.
“Not keeping to budgets is in conflict with the policy of the Government to ensure greater efficiency.”
“I know that within the public sector there are many who understand the need to move in this direction but there are also those that do not.”
To highlight the need for change, Mr Bossano said average public sector earnings in Gibraltar were 25% higher than the UK equivalent and 50% higher than in the private sector.
“Each year these gaps get bigger,” he said, adding: “This is impossible to sustain economically and difficult to justify socially.”
And he added: “With the uncertainty we face as from next year it is an issue that can no longer be ignore.”
“We have a duty to try and put things right and rebalance the relationship between the public and private sectors of the economy.”
Mr Bossano bemoaned criticism levelled by the GSD that the government was introducing austerity across the public sector even while accusing the government of overspending.
He said investment in e-government and efficiency measures would protect the long-term viability of the public sector and the services it delivers for the community.
In that context, Mr Bossano said it was necessary to look in detail at how government departments work in order to see whether things could be done differently in order to improve efficiency.
He said it was about working “smarter, not harder”, often using technology as part of the change as is happening across the globe.
“People can work very hard and produce very little value, through no fault of their own,” he said.
During a wide-ranging speech, Mr Bossano gave a detailed rebuttal to economic arguments used by the GSD last year to justify its decision to vote against the budget, concerns that the Opposition repeated again this year.
The arguments deployed by the GSD were “complete and utter nonsense”, he said.
Mr Bossano also said that it was impossible to predict what would happen after the UK and Gibraltar withdraw from the European Union in March next year.
“I cannot evaluate where we are going to be next year after March, except that we will not be members of the EU any longer and we have no idea what relationship if any the UK will then have with the EU and, if there is one, whether it will be open to us to be a part of it given article 24 and Spain’s veto, or indeed whether we would want to be part of it,” he said.
“No serious economist would venture to forecast the direction in which our economy will or should develop in 2019/20 or later years.”
“The prudential thing to do in such circumstances always is, prepare for the worst and aim for the best.”