Peter Caruana might think he has sprung a surprise on everyone with this year's Budget but he has not. Those of us that have been following his footsteps since the day he first entered politics know the measure of his tactics and were therefore not surprised to learn that this is one of the harshest Budgets in Gibraltar's history. Peter Caruana might think that people will forget the increases he is subjecting them to by the time the election is due, but this is a risk he is taking because people generally can now see through his antics and the tactics of the GSD Government.

The big question that everyone is asking themselves since the revenue measures were announced last week is why the increases if it is true that the economy is running at full blast and stronger than ever. Peter Caruana cannot have it both ways, he is either short of money because of his spendthrift ways and is having to introduce an austere budget, or he has money growing, in trees and has no need to increase anything. Instead he is telling us that he is swimming in money but that he must increase petrol prices, electricity charges, social insurance contributions and the entrance fees to the Upper Rock. No-one has yet calculated what the increased revenue derived from these measures will be in one single year but we can already safely say that it will bring in millions of pounds more to the Government, money paid for by us the taxpayers.

Those less affected by the Budget measures are the frontier workers and those living in Spain because they Will get the benefit of the small tax reduction of about £2 a week on an average pay, but are then not subjected to the increase in electricity which is the second of its kind for the second year running. Caruana has had to concede here that electricity is going up when international prices for fuel have stabilised, but he then changed his argument saying he had decided to apply the flexible fuel adjustment formula and that the element of the cost of labour was responsible for this year's increase.

This, in turn, forced him to concede that he was responsible for this by having raised the pay of people by up to 65% in some cases, in order to move employees into the Authority, this despite the fact that they all remain Government employees with Government pensions. It appears that the only thing the Electricity Authority has achieved since its inception is to increase charges two years in a row with a hint that this might now happen every year. The increases are due to come in as from 1st July which means we should see these reflected in the bill we receive in August because of the accounting system.

We then have the increase in petrol which has been accompanied by an increase at source pushing petrol prices through the roof. There are those that believe that although Caruana intends to derive more revenue with this measure, the reasoning behind touching petrol prices is to keep the Spaniards at bay because Madrid objects to the idea of Gibraltar buying petrol from the CEPSA refinery and selling it back to Spaniards that drive in with their vehicles at a cheaper price than what is available in Spain. The end result is that it affects practically everyone in Gibraltar and there is no justification for the increase because oil prices have stabilised and are on the down, not on the up.

The Social Insurance Contribution affects both the employers and the employees. The employee that has been given a couple of quid a week in tax relief will have this taken away by this increase leaving most with less money in their pockets at the end of the week.

The employers, particularly small businesses, also have a problem. They are still trying to absorb the increased prices across Europe of both the world recession and the problem of the Exchange rate caused by the weak pound. Now, on top of that, their electricity goes up, the social insurance of their employees go up and the petrol for their delivery vans also goes up, all of it together adding a pretty penny to overheads.

The question of the increase in fees to the Upper Rock [see Editorial] is also of concern to many although it affects only a section of the trade directly. And all of this comes immediately after an increase in telephone charges which is totally unjustified given the continued huge profits being made by Gibtelecom, and this has been approved by the Government.

This is the extent of the Budget measures. Caruana has painted a rosy picture of a surprise economy, totally immune to the world recession and ready to meet the challenges of a smaller tourist market and a deteriorating situation for Finance Centres around the world. His actions and the increases he has announced do not reflect what he is telling us; if indeed he expects to finish the year with a surplus, why increase any of these charges, just to show a surplus in the books? It is not politically sound to do this.

It appears that Peter Caruana needs money and he has decided to pinch our pockets to get it. Surprise! Surprise!