THE COVID-19 crisis could leave a £150 Million hole in Gibraltar coffers by June 2021, the Chief Minister announced in Parliament today.
This amount has been set apart for the COVID relief fund, with nearly £60 million being lost until June 2020.
The numbers are being added up as the financial year was extended by a further six months to March 31.
Chief Minister Fabian Picardo spoke of ‘extraordinary’ times being lived at this time in a speech in Parliament.
The decision of the Gibraltar government follows a similar move by the UK to suspend the budget for this year.
“This is the right thing to do because it will be easier also for the general public to judge our spending by reference to a simple doubling of our costs,” said Picardo.
“In terms of process, we plan to return to the traditional budgetary process as from 1 April 2021.”
The lack of income makes the greatest loss of revenue with £23 million being spent on the pandemic response.
Over £11 million was given out to pay ‘inactive’ private sector workers as part of the BEAT COVID payments scheme.
As a result, only 42 people were expected to be unemployed by the end of September.
Some of these measures will be continued throughout the next three months at least, with private landlords urged to follow suit.
The Nightingale Facility cost £1.5 million to set up, although donations added up to £1.8 million.
To fund all these expenses, borrowing has been increased to a maximum of over £80 million.
“It means Government finances are being squeezed from two sides,” said Picardo.
“We are making less and we are spending more.
“We will need to be at our most agile and innovative if we are to re-establish ourselves at the levels we enjoyed before this pandemic.
“As ever, I remain confident that with the Gibraltarian spirit and ingenuity we will get there.”
The Chief Minister finished his speech by thanking the public service for their effort and urging the nation into the challenging times ahead.
He added he would try to prevent a second lockdown at all costs.
The news came as three bus-drivers tested positive for COVID-19 today.
Contact tracing teams are investigating, with six people already believed to have come into contact with them.