Deficit budget approved for 2000

By Martin Hellicar

THE Council of Ministers yesterday approved a £2.238 million state budget for 2000.

The budget provides for only £1.366 million pouring into state coffers, and is thus a £872 million deficit budget.

Projected spending is up by £301 million compared to the 1999 budget, but an official announcement stated this was solely because defence spending had been included in the budget.

The announcement, issued after yesterday afternoon’s cabinet session, stated the regular, development, relief and defence budgets for 2000 had, for the first time ever, been unified.

The cabinet statement painted a rosy picture of the country’s economic future. Growth is expected to reach 4.5 per cent this year and 4 per cent next. Inflation in the year 2000 was expected to be low, at around 1.7 per cent, while the unemployment rate would drop to 3.4 per cent.

But the announcement also warned that the public deficit remained high and there was almost no room for more cuts in public spending. The only solution, the cabinet stated, was to increase indirect taxation such as VAT.

“Without further reinforcement of public income, the public deficit is predicted to reach £357 million in the year 2000, or 6.9 per cent of GDP, from £275 million, or 5.6 per cent of GDP in 1999,” the statement read.

The government has long been trying to get opposition parties to give the nod to tax hikes.

To be approved, the state spending plans for 2000 must now run the gauntlet of a House of Representatives in which the government does not enjoy a majority.

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