By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A cabinet minister said that the government will “achieve” and “surpass” the budget targets in terms of the deficit with a goal to get the debt to GDP down to 50 percent by 2031.

Michael Halkitis, Minister of Economic Affairs, told the Prime Minister's Office's weekly media briefing that the debt to GDP is now in the “low 80s", coming down from more than 100 percent just a few short years prior.

Mr Halkitis also said: “We are on track, but there is a lot of work left to be done so that we can meet our targets. I want to say two things, in terms of spending, because I know as the budget commences in the immediate aftermath or the immediate reaction to the budget, there's always some allegation or statement that the government is not controlling its spending. But if you look at this budget, this upcoming budget next year, we anticipate spending to increase over this year's level by $12m.

“So government spending is budgeted increased by $12m and let me put that in some context: For government spending in this fiscal year, is anticipated to be $3.074bn and next year $3.085bn.

He continued, “An increase of around $12m. That is less than one half of a one percent increase exactly 0.4 percent increase, less than half of one percent. If you look at it, if you adjusted for inflation, it's actually a cut in spending.”

Simon Wilson, the financial secretary, meanwhile added that revenues have been boosted by the resumption of BTC’s dividends from Liberty Global, the first time in five years the government has received dividends from the telecommunications provider. He added that for this year revenue is growing at 11 percent and for the upcoming year revenue growth is projected at ten percent off of the back of increases tax collection in real property taxes and a consistent approach to tax collection overall.

There will also “not be an increase in broad base taxes", but rather there will be increases in certain fees and levies, particularly, an addition of an immigration work permit levy and an increase in the departure tax, both of which Mr Halkitis said is “targeted at foreigners", primarily.

He also said: “The other point I just wanted to touch on is this whole issue of aggressive tax collection, as the Prime Minister said, the revenue agencies are doing their jobs and collecting what is due and outstanding, they stand ready for those who need to have to structure a payment plan, forgiveness or whatever, they stand ready to work with them in that area. But, our efforts are aimed at those who are, you know, chronic delinquents who are really demonstrating no willingness, even though they might have the ability, no willingness to pay and so we will see our enforcement efforts continue, and they have been bearing fruit.

“Next year, we project a budget deficit less than one percent and just put that into context just two years ago, our budget deficit was over 13 percent. So a budget deficit of less than one percent next year, meaning that we anticipate the following 2024/2025 to at least have a balanced budget.”