Budget Day Brings Surprises
Chancellor Fifi DePfeffel has presented her budget to parliament today. Headline figures for economic growth are 6.5% for the USI, bringing the total GDP to 6.82 Trillion, with the population increasing by 3.1 million overall leading to the USI population exceeding 100 million for the first time.
The Izaakian economy has grown 10.3%, driven primarily by immigration under the 30 for 30 scheme at an 8% (1.9 million) increase in the population to 25.9 million. GDP per capita raised a comparatively low 2.2%.
The Montacian economy has grown 4.4%, largely driven by a 3.3% increase in per capita GDP and a population increase of 0.5 million to 46 million.
The Brodlancian economy has grown 6.1%, driven by a 3.6% per capita growth, and an increase in population of 0.7 million to 29.2 million.
The Government has cut taxation by $300 billion from the previous budget, eliminating most of the fiscal headroom in the budget. With Space, Social Security and Foreign Aid taking 3% budget cuts, and Health taking a 1% real terms budget reduction. Spending on the military will increase by $40 billion to $266 billion, which whilst lower than during the conflict with Ryccia, is much higher than expected based on the previous governments announcements bringing military spending to 3.9% of GDP. Internal development, housing, education, policing and the environment have also had major spending increases.
The government maintains a budgetary surplus of $20.4 billion for as yet unspecified projects. The Izaakian sovereign wealth fund investments grew by 7% ($206billion) however due to the N&GB, Valora and Ryccian conflicts, and other commitments abroad and at home, including Blancopolis construction, this money has been spent, leaving the Sovereign Wealth fund at $2.94 trillion.
Inflation in the 2022 to 2023 period has run high at 4.4%, above the USI target of 2%, meaning many Izaakians are worse off compared to last year. The Bank of Izaakia has announced it is increasing the base interest rates from 0.75% to 1.25% to try and control inflation.
Major Policy Announcements include:
Reduction in alcohol tax by 10c in pubs compared to shops.
Increasing the retirement age from 66 to 67 from 2025.
Confirmation Blancopolis will be a low tax zone until at-least 2035.
Reactions
The government has described the results as promising, and spending commitments as sensible in order to supercharge the economy.
The Department for Fiscal Responsibility has estimated costs of conflict in 2022 to be in the region of $1.04 trillion.
The leader of the opposition (Framboise Madeleine) Charles Boulangerie described real term declines in wages and health spending as a scandal.
Conservative leader Mr Choo has described the immigration statistics as shocking, and has said beaches should be mined, and anti-aircraft guns placed at airports to keep the swarming masses out.