It is one of the duties and obligations of politicians in government to create the right environment for business to succeed, to create employment and wealth. It is in the interest of governments to do this, not least, because by doing so they can increase their tax revenues and distribute wealth by introducing appropriate social and health systems to look after those who are less fortunate. It is not right for governments to promote and encourage and subsidise business ventures for purely political reasons. There are two prime examples where the GSD Government has done so and both seem to be in difficulty. The first is flights to Madrid. The second is the ferry to and from Algeciras.
These ventures owe their existence to outcomes of the Trilateral Process. They do not owe their lives to hard nosed business decisions. What value is there in once daily flights to Madrid when there are regular services from Malaga, Jerez and Seville, all within 90 minutes drive from Gibraltar? What business sense is there in the ferry service to and from Algeciras when many now have cars and, if they do not, there are regular buses or availability of taxis? was it just nostalgia because in the early 1960's such a service existed?
Undoubtedly there was a need to have a new Air Terminal but did we need such a large one at such great expense? Is the connection to Spain a business or political decision? If there are no flights to Spanish destinations, what is the point? The expense of building a new road and tunnel to cross the airport was right and a necessary expense, but the rest, time will tell. The added issue is the cost of maintaining such a large Air Terminal. If revenue from the operation of the Air Terminal does not increase by increased use, that added cost will fall on taxpayers.
One commentator asked that the issue of tax advantages to non-Gibraltarians be raised here. In this regard it is right and the duty of government to create the correct legal environment to stimulate the increased use of Gibraltar for these purposes. Gibraltar's economy (and so its wealth and ability to help the less able and fortunate) is dependent on very few sectors, these include the port, tourism, retail and export trade and importantly the finance centre. The finance centre produces about a third of Gibraltar's wealth. It provides employment directly and indirectly. It stimulates the building trade (which should not be and is not to the detriment of but helps to finance the construction of social and local housing). The fiscal advantages given to non-Gibraltarians are not at the expense of any taxpayer. In fact the encouragement of this sector allows the Government to continue its policy of reducing taxes for all in Gibraltar.
It is difficult to see why a need will arise to replace the revenue lost by changing the beneficial tax system that stimulates the finance centre. Gibraltar should continue to promote the finance centre with appropriate legislation and seek to improve this offering.