The regional government, in other words PSOE and Més, has fought off the budgetary challenge of Podemos and will stick to its spending for tourism promotion in 2017 - all of 3.6 million euros. Podemos had wanted the bulk of this budget (three million) to be devoted to the innovation and research part of Biel Barceló's ministry. The government parties were having none of this. Toni Reus of Més, a former mayor of Santa Margalida, said that the spending was targeted at precisely the objectives that Podemos had accepted in drawing up the agreement for government with PSOE and Més - such as cultural and gastronomy tourism and tackling tourism seasonality. Damià Borràs of PSOE told Podemos that the promotion will assist in extending the tourism season and therefore workers' contracts.
While Més, some elements within it at any rate, may be characterised as being sympathetic to the tourist limits or tourist reduction camp, this was not what came across during the debate on the promotion budget. Laura Camargo of Podemos insisted that her party was the only one that was wishing to "put a brake" on the number of tourists. As for tackling seasonality, this will be like "pouring petrol on the fire", she argued. "We do not want more tourists in summer or in winter." She then went on to say that after eight months of work during the season, workers were exhausted. They shouldn't now have to be called on to work in the winter as well.
Of Camargo's remarks, one might observe that workers who have put in eight-month stints are the lucky ones, and while it is undeniable that many workers in the tourism industry work long hours, why should it be deemed acceptable that they should not work more than eight months? This is the conclusion one draws from what Camargo was saying, and it is a conclusion which reinforces the skewed basis of the Balearic economy: work for x number of months and put your feet up for y months of the year, hopefully with sufficient benefit to see you through. Does she not also appreciate that there are workers who disappear in winter and look for and find work where there is a winter season, e.g. the Canaries? Not all of them are exhausted.
Podemos wanted the money to go towards innovation and research because the party believes that this will assist in creating the much-spoken-about changed economic model, one that is more diversified, less reliant on tourism and spreads wealth more evenly. But PSOE and Més want the same thing. Any political party with a modicum of common sense would want this. The difference with Podemos, or so it seems, is that this change can be brought about by diminishing the main sector of the islands' economic activity, which is plainly wrongheaded. The more that tourism is buoyant, the more it generates wealth and revenue for the government. Not all of this wealth is ploughed back or shared through decent salaries with the general workforce - that is a rightful beef - but much of it is and so can, with the right political and financial management, be targeted at diversification.
The announcement of a new Balearic stand for travel fairs will doubtless therefore have caused convulsions within Podemos. The promotional spend, such as it is, goes in great part towards travel fairs, and the new stand (its design at any rate) was revealed earlier this week. Its maiden appearance will be at Madrid's Fitur fair in January.
The Balearic Tourism Agency describes this as conveying a "fresher and more Mediterranean" image, and the message it will be helping to get across will be one aimed at tackling both seasonality and summer season "saturation". The slogan will be "best in winter", with emphasis being placed - you won't be surprised to learn - on gastronomy, culture and heritage.
Showing posts with label Budget. Show all posts
Showing posts with label Budget. Show all posts
Thursday, December 22, 2016
Saturday, November 05, 2016
What Does The Tourism Promotion Agency Do?
The Balearic Tourism Agency (ATB) is the government agency which markets the Balearics as a tourist destination. Its budget for next year is being cut to 19.5 million euros. Based on recent experience, less than 20% will go on direct promotion, which doesn't mean advertising but does mean travel fairs and other such actions. London's World Travel Market, which starts on Monday, is one of the main items of expenditure. We may well be informed how much is being spent on this annual trip, but if we want to find out from the agency's action plan for 2016, we will be disappointed.
I keep archives of these plans. I went looking for 2016's and couldn't find it. On the agency's website, there is a link to a plan, but it isn't this year's; it's the one for 2015. Perhaps they didn't bother making a plan; so much for transparency. Maybe this had something to do with the revolving door at the agency, which saw the departure of the director who was initially appointed by Biel Barceló (it was said he got a better offer) replaced by an old friend of Barceló's, Pere Muñoz. Who can say?
One has to rely, therefore, on the 2015 plan for information. That showed that the London fair was the third costliest event. The quarter of a million budget was exceeded slightly by the budget for Berlin's ITB and greatly exceeded (by 129,000 euros) by the spend on Madrid's Fitur. Who were they wanting to promote to more? The British, the German or the Spanish market? The latter, it would seem: always well behind the UK and Germany in terms of tourist numbers.
The total cost of the various fairs and other exercises, such as press trips, was approximately 3.7 million euros. So what exactly was the agency doing - or planning on doing - with the rest of its budget (other than paying staff and advisers)? Well, there were, for example 4.9 million euros set aside for "territory actions", which meant investment in infrastructure. Of these - and there were thirteen of them - there was at least one that wasn't carried out. The second highest budgeted amount (837,000 euros) was for phase B of the boulevard in Playa de Muro. I'm unaware of there having been a phase A let alone B. What happened to the money for that then?
Going back to the budget for travel fairs and other actions, the 2015 plan stated that the market for 66 of them was yet to be determined. In other words, the plan didn't specify in which country 43% of these actions were to be undertaken. A footnote says that these would be determined once requests had been received from Spain's overseas tourism offices. Were they all, in the end, undertaken?
There is a question, therefore, about previous budgets. Was the money used for other purposes, or has it been held over? If there were other purposes, what were they? Is the reduction in the budget for 2017 a reflection of money in reserve? Some explanation would be welcome.
I keep archives of these plans. I went looking for 2016's and couldn't find it. On the agency's website, there is a link to a plan, but it isn't this year's; it's the one for 2015. Perhaps they didn't bother making a plan; so much for transparency. Maybe this had something to do with the revolving door at the agency, which saw the departure of the director who was initially appointed by Biel Barceló (it was said he got a better offer) replaced by an old friend of Barceló's, Pere Muñoz. Who can say?
One has to rely, therefore, on the 2015 plan for information. That showed that the London fair was the third costliest event. The quarter of a million budget was exceeded slightly by the budget for Berlin's ITB and greatly exceeded (by 129,000 euros) by the spend on Madrid's Fitur. Who were they wanting to promote to more? The British, the German or the Spanish market? The latter, it would seem: always well behind the UK and Germany in terms of tourist numbers.
The total cost of the various fairs and other exercises, such as press trips, was approximately 3.7 million euros. So what exactly was the agency doing - or planning on doing - with the rest of its budget (other than paying staff and advisers)? Well, there were, for example 4.9 million euros set aside for "territory actions", which meant investment in infrastructure. Of these - and there were thirteen of them - there was at least one that wasn't carried out. The second highest budgeted amount (837,000 euros) was for phase B of the boulevard in Playa de Muro. I'm unaware of there having been a phase A let alone B. What happened to the money for that then?
Going back to the budget for travel fairs and other actions, the 2015 plan stated that the market for 66 of them was yet to be determined. In other words, the plan didn't specify in which country 43% of these actions were to be undertaken. A footnote says that these would be determined once requests had been received from Spain's overseas tourism offices. Were they all, in the end, undertaken?
There is a question, therefore, about previous budgets. Was the money used for other purposes, or has it been held over? If there were other purposes, what were they? Is the reduction in the budget for 2017 a reflection of money in reserve? Some explanation would be welcome.
Monday, December 07, 2015
Eighty Million In The Bag
I'm assuming that you won't have forgotten that there's supposedly going to be a tourist tax (aka sustainable tourism tax) from next year and that you may also not have forgotten that the government reckons it could coin in some 80 million from it. Being conservative (with a very small c), CC, the regional finance person, drew up her 2016 budget with a reduced sum - a mere 50 million - albeit that BB, for some reason and despite having been the vice-presidential tourism person who'd dreamt the tax up, thought it wiser not to include anything. You may also recall that they've yet to decide why they want this 50 or 80 million, other than for sustainable purposes, and so have no idea what it will be spent on.
Armengol, Barceló and Cladera, the ABC of the PM(P) government of the Balearics, made their way to Madrid earlier this week. And there, sitting on top of his mountain of gold, was the Count of Montoro, sometimes referred to as the national finance minister. It was, it seems, as simple as ABC. "Oh, Count, can we have 240 million, pretty please?" The Count looked sweetly at Sweet Francina, thought for a moment and replied "why not?". "Have some loose change, Biel," he boomed, hurling a bag of gold coins at the vice-presidential tourism person, who could recognise a "moderately" satisfactory 80 million heading in his general direction and thence into Catalina Cladera's annual budget.
Why only 80 million? Well, that's because the Count has promised that there will be two more bags of coins in 2017 and 2018, both of them amounting to 80 million. The government can count, therefore, on the Count's largesse for being able to pencil in 80 million guaranteed wonga for the next three years, to say nothing of any boosts to the region's coffers if ABC find the next government as easy to persuade as the Count finally turned out to be. Not, or so it seems, that CC knows how the money will be spent. Yet. Well, if you get a sudden Christmas windfall, you wouldn't, would you.
The reason for these bags of gold raining down from the skies is that the money should have been forthcoming for building some roads several years ago. The likelihood is that money from elsewhere was found for this building. So, here we have a government, 80 million better off for the next three years, not knowing how to spend the money but knowing they've definitely got it, while at the same time it is making budgetary inclusions - up to 80 million - for money it hasn't definitely got and doesn't in any event know how it will spend it.
It would be far too simple, wouldn't it.
Armengol, Barceló and Cladera, the ABC of the PM(P) government of the Balearics, made their way to Madrid earlier this week. And there, sitting on top of his mountain of gold, was the Count of Montoro, sometimes referred to as the national finance minister. It was, it seems, as simple as ABC. "Oh, Count, can we have 240 million, pretty please?" The Count looked sweetly at Sweet Francina, thought for a moment and replied "why not?". "Have some loose change, Biel," he boomed, hurling a bag of gold coins at the vice-presidential tourism person, who could recognise a "moderately" satisfactory 80 million heading in his general direction and thence into Catalina Cladera's annual budget.
Why only 80 million? Well, that's because the Count has promised that there will be two more bags of coins in 2017 and 2018, both of them amounting to 80 million. The government can count, therefore, on the Count's largesse for being able to pencil in 80 million guaranteed wonga for the next three years, to say nothing of any boosts to the region's coffers if ABC find the next government as easy to persuade as the Count finally turned out to be. Not, or so it seems, that CC knows how the money will be spent. Yet. Well, if you get a sudden Christmas windfall, you wouldn't, would you.
The reason for these bags of gold raining down from the skies is that the money should have been forthcoming for building some roads several years ago. The likelihood is that money from elsewhere was found for this building. So, here we have a government, 80 million better off for the next three years, not knowing how to spend the money but knowing they've definitely got it, while at the same time it is making budgetary inclusions - up to 80 million - for money it hasn't definitely got and doesn't in any event know how it will spend it.
It would be far too simple, wouldn't it.
Monday, November 02, 2015
On Balearic Budget Day
When British Chancellors of the Exchequer make their budget statements, the ritual requires that the incumbent is photographed with a cheesy grin, holding aloft a battered old box that some lackey has recovered from the bottom of the Exchequer wardrobe and smashed with a hammer a couple of times to add greater beaten-up authenticity. Never trust a Chancellor with a brand new, shiny, state-of-the-art box acquired at some considerable cost from the nearest Staples. In tattiness we budgetary trust. Once stated, members of the media are dispatched to Redditch and other such middle England enclaves of which no one would normally ever hear about, except on budget day. They wander the streets and shopping malls, eyeing up their victims and seeking answers as to the budget impact on smoking and alcohol behaviour. This is then followed by Robert Peston in full hair mode, uttering the utterly unintelligible in a style of incoherent incomprehension known only to him.
In Mallorca they don't bother with such rituals, save for the ones which demand that Madrid is blamed for everything and the actual process of budget finalisation then undergoes parliamentary amendments, which this year require Podemos insisting that 50% of public spending goes towards soup kitchens and supporting the cause of rebel forces in deepest Bolivia. Presiding over all this is Xe-Lo, nodding sagely in Speaker attire as another several million are reallocated to an environmental campaign to conserve the ancient mountain ant of the Tramuntana. (Actually, although Podemos aren't happy with the budget, their proposed amendments will not be of such extravagant nature.)
CC, i.e. Catalina Cladera, had her first chance to shine as keeper of the islands' piggy bank, in informing us all that the Balearic budget represented "a social turn demanded by the people", to which the Pons fellow, the one who is meant to explain the inexplicable, added that it could be characterised as "a turn of the left". The government is for turning. They didn't of course tarry when it came to quite how the highest Balearic budget ever was exactly going to be spent. It was only when the local Pestons started poring over the small print that it was discovered that the last thing that THAT tax would be spent on would be tourism. CC even appeared to admit that THAT tax would end up compensating for health service deficit. Blame Madrid, don't blame me. To then make things truly dandy, in a touristic sense, it was revealed that the budget for tourism was going down. Even further down than it already is. 52.7 million in total, with 32.8 million going to what supposedly makes the islands tick - the Balearic Tourism Agency: promotion and all that.
Tourism budget austerity began with the PP. Carlos Delgado was so parsimonious that the Balearic contingent once arrived in Berlin with little more than a flip-chart and some marker pens that had run out of ink and had ended up being the embarrassment of the Berlin travel fair. The austerity is now greater. Blame Madrid. One trusts that BB, the tourism minister, has booked himself into an economy-class hostel in King's Cross while he's off on the jolly to London to use Mallorcan tumbet and frito as the gastronomic frontline defence against the armed ranks of the British media seeking to rip THAT tax to shreds. One hopes to God Biel doesn't drone on about sobrassada, given that the World Health Organization has decided that anyone consuming it is about to be rushed to the oncology wing of Son Espases. But while he's over in London, he might want to have a quiet word with the Met about the policing of "alternative" clubs, those in the vicinity of King's Cross or elsewhere. Plenty of experience there. All historical now of course from the days when the London cops made Palma's Green Patrol and GAP look like Sam Tylers compared with the Gene Hunts of yore.
In Mallorca they don't bother with such rituals, save for the ones which demand that Madrid is blamed for everything and the actual process of budget finalisation then undergoes parliamentary amendments, which this year require Podemos insisting that 50% of public spending goes towards soup kitchens and supporting the cause of rebel forces in deepest Bolivia. Presiding over all this is Xe-Lo, nodding sagely in Speaker attire as another several million are reallocated to an environmental campaign to conserve the ancient mountain ant of the Tramuntana. (Actually, although Podemos aren't happy with the budget, their proposed amendments will not be of such extravagant nature.)
CC, i.e. Catalina Cladera, had her first chance to shine as keeper of the islands' piggy bank, in informing us all that the Balearic budget represented "a social turn demanded by the people", to which the Pons fellow, the one who is meant to explain the inexplicable, added that it could be characterised as "a turn of the left". The government is for turning. They didn't of course tarry when it came to quite how the highest Balearic budget ever was exactly going to be spent. It was only when the local Pestons started poring over the small print that it was discovered that the last thing that THAT tax would be spent on would be tourism. CC even appeared to admit that THAT tax would end up compensating for health service deficit. Blame Madrid, don't blame me. To then make things truly dandy, in a touristic sense, it was revealed that the budget for tourism was going down. Even further down than it already is. 52.7 million in total, with 32.8 million going to what supposedly makes the islands tick - the Balearic Tourism Agency: promotion and all that.
Tourism budget austerity began with the PP. Carlos Delgado was so parsimonious that the Balearic contingent once arrived in Berlin with little more than a flip-chart and some marker pens that had run out of ink and had ended up being the embarrassment of the Berlin travel fair. The austerity is now greater. Blame Madrid. One trusts that BB, the tourism minister, has booked himself into an economy-class hostel in King's Cross while he's off on the jolly to London to use Mallorcan tumbet and frito as the gastronomic frontline defence against the armed ranks of the British media seeking to rip THAT tax to shreds. One hopes to God Biel doesn't drone on about sobrassada, given that the World Health Organization has decided that anyone consuming it is about to be rushed to the oncology wing of Son Espases. But while he's over in London, he might want to have a quiet word with the Met about the policing of "alternative" clubs, those in the vicinity of King's Cross or elsewhere. Plenty of experience there. All historical now of course from the days when the London cops made Palma's Green Patrol and GAP look like Sam Tylers compared with the Gene Hunts of yore.
Thursday, October 15, 2015
Just Another Tax?: Balearic finances
The government has released its projections for revenue generation in 2016. And by revenue generation one means tax. Buried among the various contributions is what is referred to as "other taxes". This shows a 50 million euro increase over 2015. It is the provision, so it is believed, for the tourist tax, a rather more modest number than the 100 million or more that has been spoken of but which would be attainable only with what would prove to be an onerous levy.
It's difficult to judge how accurate the provision is without knowing what exemptions there might be (children) or what the cap will be on the number of overnight stays (of which it has been suggested they may be only five). It's also difficult because of the number of visitors who won't pay it because there will be no mechanism to do so through accommodation. This is why the government is so keen to have collection at ports and airports, a scheme which, however, could prove as unworkable as it would be damaging (even more damaging) in PR terms. That Madrid appears disinclined to meet the regional transport minister to discuss the subject is to Madrid's credit.
The inclusion of the provision for the tourist tax in the revenue forecast is fair enough, but the very fact of its inclusion lends weight to the argument that the tax will merely be a further means of boosting general revenues, i.e. it will be treated as a general tax. As the government continues to faff around and change its mind on an almost daily basis as to what its purpose is, this impression strengthens. But above all, there is the whole question of government finance. It bangs on constantly about the 0.3% deficit ceiling for 2016, one on which Madrid will not budge, making it ever clearer that the tourist tax is a device for addressing spending capacity that will be denied to the government because of the ceiling.
The government does, though, have to consider its spending as a consequence of its own specific tax-raising. The greater its capacity, the more Madrid might be inclined to penalise the government when it comes to the funding allocation derived from the system that the government considers so unfair: the redistribution of tax revenues to richer and poorer regions of Spain. It is an unfair system in that the Balearics have constantly been left well short because of the high levels of income tax and IVA (VAT) returns compared with other regions. But the more revenue that the government derives from its own specific regional taxes, the more the liquidity funds and what have you that Madrid controls will be biased towards the farmers of Extremadura. It is a bit of a Catch 22 in this regard, but that is how the system, flawed as it is, works.
The expectation is that this will all change if the national government changes and PSOE's Pedro Sánchez becomes prime minister. It may well change, but change is already afoot, the Rajoy administration having conceded that the financing system needs to be amended and to be made more favourable to the Balearics. For all that Rajoy has applied austerity, the point needs to be made that Madrid has brought about some discipline with regions' finances, though even it has been unable to effect major improvements to debt levels: the regional government, left a legacy of enormous debt by the Bauzá regime, wants to negotiate with the banks.
Even once the government does finally define the tourist tax - the amount, the length of stay, the exemptions, the means of collection, the use (or uses) - the arguments will continue, and the Balearic tax will attach far greater controversy than similar taxes elsewhere, some of which are little known about. A correspondent of mine mentioned a conversation he had with a tourist who has come to Mallorca twice this year rather than dividing his two annual holidays between Mallorca and Tunisia (for obvious reasons). This tourist says that he won't be returning to Mallorca if there is a tax, but then Tunisia has one of its own - a departure tax.
The point is, though, that regardless of taxes in what are direct competitor destinations - Morocco, Tunisia, Croatia, Bulgaria, Catalonia, parts of France and even perhaps Dubai - the Mallorcan visitor appears unmoved by the argument and the comparison.
The same tourist of my correspondent's acquaintance says why don't they just hide the tax and apply it some other way and not make an issue of it. Possibly they could, but I've other suggestions. Why not make it a tourist lottery? Or make it voluntary? As President Armengol believes that tourists are willing to be so generous with the tax, who knows, the government might rake in even more from a massive Balearic tipping scheme. Couldn't be done though, as the tax budget wouldn't allow it.
It's difficult to judge how accurate the provision is without knowing what exemptions there might be (children) or what the cap will be on the number of overnight stays (of which it has been suggested they may be only five). It's also difficult because of the number of visitors who won't pay it because there will be no mechanism to do so through accommodation. This is why the government is so keen to have collection at ports and airports, a scheme which, however, could prove as unworkable as it would be damaging (even more damaging) in PR terms. That Madrid appears disinclined to meet the regional transport minister to discuss the subject is to Madrid's credit.
The inclusion of the provision for the tourist tax in the revenue forecast is fair enough, but the very fact of its inclusion lends weight to the argument that the tax will merely be a further means of boosting general revenues, i.e. it will be treated as a general tax. As the government continues to faff around and change its mind on an almost daily basis as to what its purpose is, this impression strengthens. But above all, there is the whole question of government finance. It bangs on constantly about the 0.3% deficit ceiling for 2016, one on which Madrid will not budge, making it ever clearer that the tourist tax is a device for addressing spending capacity that will be denied to the government because of the ceiling.
The government does, though, have to consider its spending as a consequence of its own specific tax-raising. The greater its capacity, the more Madrid might be inclined to penalise the government when it comes to the funding allocation derived from the system that the government considers so unfair: the redistribution of tax revenues to richer and poorer regions of Spain. It is an unfair system in that the Balearics have constantly been left well short because of the high levels of income tax and IVA (VAT) returns compared with other regions. But the more revenue that the government derives from its own specific regional taxes, the more the liquidity funds and what have you that Madrid controls will be biased towards the farmers of Extremadura. It is a bit of a Catch 22 in this regard, but that is how the system, flawed as it is, works.
The expectation is that this will all change if the national government changes and PSOE's Pedro Sánchez becomes prime minister. It may well change, but change is already afoot, the Rajoy administration having conceded that the financing system needs to be amended and to be made more favourable to the Balearics. For all that Rajoy has applied austerity, the point needs to be made that Madrid has brought about some discipline with regions' finances, though even it has been unable to effect major improvements to debt levels: the regional government, left a legacy of enormous debt by the Bauzá regime, wants to negotiate with the banks.
Even once the government does finally define the tourist tax - the amount, the length of stay, the exemptions, the means of collection, the use (or uses) - the arguments will continue, and the Balearic tax will attach far greater controversy than similar taxes elsewhere, some of which are little known about. A correspondent of mine mentioned a conversation he had with a tourist who has come to Mallorca twice this year rather than dividing his two annual holidays between Mallorca and Tunisia (for obvious reasons). This tourist says that he won't be returning to Mallorca if there is a tax, but then Tunisia has one of its own - a departure tax.
The point is, though, that regardless of taxes in what are direct competitor destinations - Morocco, Tunisia, Croatia, Bulgaria, Catalonia, parts of France and even perhaps Dubai - the Mallorcan visitor appears unmoved by the argument and the comparison.
The same tourist of my correspondent's acquaintance says why don't they just hide the tax and apply it some other way and not make an issue of it. Possibly they could, but I've other suggestions. Why not make it a tourist lottery? Or make it voluntary? As President Armengol believes that tourists are willing to be so generous with the tax, who knows, the government might rake in even more from a massive Balearic tipping scheme. Couldn't be done though, as the tax budget wouldn't allow it.
Tuesday, January 01, 2013
MALLORCA TODAY - Sa Pobla project investment negligible in 2013
Sa Pobla town hall is expected to approve at its next meeting this coming Thursday a budget for investment on projects for 2013 that will be only 200,000 euros, three million less than 2012.
See more: Ultima Hora
See more: Ultima Hora
Sunday, January 01, 2012
The Pain In Spain 2012
Welcome to 2012. If you live and work in Mallorca, the good news is that you will be paying more income tax. A nice way to bring in the new year.
The announcement by the Spanish Government that income tax will rise is just one of a package of austerity measures. It shouldn't have come as a surprise, except that prior to the election Mariano Rajoy had implied that income tax wouldn't go up. Promises or statements can swiftly be reneged upon and can easily be justified by putting the blame on a situation left behind by the Zapatero administration that was worse than had been expected. It is a wholly disingenuous justification. Voters were idiots if they had really believed taxes wouldn't go up.
The government, in increasing income tax rather than IVA (VAT), argues that this will be less damaging to economic recovery. Who are they trying to kid? Fiscal measures, be they direct or indirect taxation increases, are harmful. At least with keeping direct taxation at the same level, there is theoretically more disposable income. The government's argument is fatuous.
A sensible measure that the government has taken in respect of IVA is not to reduce it for tourism businesses. Again, it is something of a broken promise, but it was a promise that was flawed. Tax receipts from IVA rose in 2011, thanks to a one per cent rise to 8% for tourism businesses. With prospects for tourism in 2012 bright and northern Africa still in turmoil, an IVA reduction would have been unnecessary and a mistake.
The government is faced with an enormous challenge. Of course it is, and it is being realistic in terms of the degree to which it can get the deficit down, but its measures will do little to stimulate recovery. IVA will be reduced for new-property purchase, which may help, but with credit in such short supply, it is mere tinkering.
Spain is pretty much back in recession and Mallorca and the Balearics are as well, despite what the regional government might think. The banks don't think the same and have said so. Tourism, for Mallorca, will be the saviour as it was in 2011, but the island's prospects are otherwise as bleak as they are for the country as a whole.
There must have been consternation in the corridors of Balearics political power when the news came through that central government intended not to extend financing to the islands (along with three other regions) as had been promised. Whether President Bauzá was on the phone to Rajoy demanding to know what was going on we don't know, but the central finance ministry issued a further announcement saying that there had been an error and that no agreement as to a finance cut (elimination in fact) had been arrived at. Again, who are they trying to kid? You don't just make a mistake when it comes to this sort of an announcement, or if you do, it doesn't say much for how joined up central government is.
The swiftness with which the mistake was admitted does suggest that some stern words were had. For Bauzá, so intimately linked to Rajoy, it was news he could have done without, as pressure starts to mount on him and dissent from within his own party increases, the result in part of the closeness both personally and in philosophy between Bauzá and Rajoy. The withdrawal of central finance would also, in all likelihood, have put the kibosh on certain projects in Mallorca; bad PR again for Bauzá who would find it extremely difficult to criticise his PP masters, having so slavishly been prepared to follow them.
Away from the budget, another announcement by central government has a distinct Mallorcan flavour, and that is the appointment of Isabel Borrego as tourism secretary of state. It had been expected that a Mallorcan would be appointed, even if Miquel Ramis had been the front-runner, but is Borrego's appointment as positive as Ramis' might have been? Ramis does have direct experience of tourism, where Borrego doesn't. The government says that this doesn't matter as Borrego's predecessor, Joan Mesquida, also didn't have direct experience. It's a weak argument to say the least.
Various organisations have been quick to support Borrego's appointment, but then they always are; it is known as being diplomatic. The most positive thing that is being said about Borrego is that her background in property and in law is an advantage. An advantage? What for exactly? Or for whom? One guess. Hotels. The worry is that Borrego will be inward-looking in addressing more arcane aspects of tourism, such as the application of various laws as they apply to the industry and to developments, rather than outward-looking in terms of marketing.
So, here we are at the start of 2012. It is going to be a rocky ride this year and unfortunately it hasn't started very encouragingly.
Any comments to andrew@thealcudiaguide.com please.
The announcement by the Spanish Government that income tax will rise is just one of a package of austerity measures. It shouldn't have come as a surprise, except that prior to the election Mariano Rajoy had implied that income tax wouldn't go up. Promises or statements can swiftly be reneged upon and can easily be justified by putting the blame on a situation left behind by the Zapatero administration that was worse than had been expected. It is a wholly disingenuous justification. Voters were idiots if they had really believed taxes wouldn't go up.
The government, in increasing income tax rather than IVA (VAT), argues that this will be less damaging to economic recovery. Who are they trying to kid? Fiscal measures, be they direct or indirect taxation increases, are harmful. At least with keeping direct taxation at the same level, there is theoretically more disposable income. The government's argument is fatuous.
A sensible measure that the government has taken in respect of IVA is not to reduce it for tourism businesses. Again, it is something of a broken promise, but it was a promise that was flawed. Tax receipts from IVA rose in 2011, thanks to a one per cent rise to 8% for tourism businesses. With prospects for tourism in 2012 bright and northern Africa still in turmoil, an IVA reduction would have been unnecessary and a mistake.
The government is faced with an enormous challenge. Of course it is, and it is being realistic in terms of the degree to which it can get the deficit down, but its measures will do little to stimulate recovery. IVA will be reduced for new-property purchase, which may help, but with credit in such short supply, it is mere tinkering.
Spain is pretty much back in recession and Mallorca and the Balearics are as well, despite what the regional government might think. The banks don't think the same and have said so. Tourism, for Mallorca, will be the saviour as it was in 2011, but the island's prospects are otherwise as bleak as they are for the country as a whole.
There must have been consternation in the corridors of Balearics political power when the news came through that central government intended not to extend financing to the islands (along with three other regions) as had been promised. Whether President Bauzá was on the phone to Rajoy demanding to know what was going on we don't know, but the central finance ministry issued a further announcement saying that there had been an error and that no agreement as to a finance cut (elimination in fact) had been arrived at. Again, who are they trying to kid? You don't just make a mistake when it comes to this sort of an announcement, or if you do, it doesn't say much for how joined up central government is.
The swiftness with which the mistake was admitted does suggest that some stern words were had. For Bauzá, so intimately linked to Rajoy, it was news he could have done without, as pressure starts to mount on him and dissent from within his own party increases, the result in part of the closeness both personally and in philosophy between Bauzá and Rajoy. The withdrawal of central finance would also, in all likelihood, have put the kibosh on certain projects in Mallorca; bad PR again for Bauzá who would find it extremely difficult to criticise his PP masters, having so slavishly been prepared to follow them.
Away from the budget, another announcement by central government has a distinct Mallorcan flavour, and that is the appointment of Isabel Borrego as tourism secretary of state. It had been expected that a Mallorcan would be appointed, even if Miquel Ramis had been the front-runner, but is Borrego's appointment as positive as Ramis' might have been? Ramis does have direct experience of tourism, where Borrego doesn't. The government says that this doesn't matter as Borrego's predecessor, Joan Mesquida, also didn't have direct experience. It's a weak argument to say the least.
Various organisations have been quick to support Borrego's appointment, but then they always are; it is known as being diplomatic. The most positive thing that is being said about Borrego is that her background in property and in law is an advantage. An advantage? What for exactly? Or for whom? One guess. Hotels. The worry is that Borrego will be inward-looking in addressing more arcane aspects of tourism, such as the application of various laws as they apply to the industry and to developments, rather than outward-looking in terms of marketing.
So, here we are at the start of 2012. It is going to be a rocky ride this year and unfortunately it hasn't started very encouragingly.
Any comments to andrew@thealcudiaguide.com please.
Friday, September 02, 2011
MALLORCA TODAY - Pollensa town hall unable to approve budget
The minority town hall administration of eight councillors (Partido Popular and La Lliga) in Pollensa has had its budget for 2011 blocked by the nine-person opposition. The administration had hoped that the councillor for the Unió Mollera Pollencina would abstain, but he chose to vote against. Opposition groups complain that they have had insufficient time to consider the budget proposals.
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