Tag Archives: Government Loan Requirements

LONDON (Reuters) – A one-time wealth tax may be a way for UK finance minister Rishi Sunak to close a huge hole in the country’s public finances caused by the COVID-19 pandemic, an influential lawmaker said Monday.

FILE PHOTO: UK Chancellor of the Exchequer Rishi Sunak takes part in an outside broadcast interview, in London, England, 26 November 2020. REUTERS / Toby Melville

Mel Stride, chair of the parliament’s Finance Committee, said other countries such as France and Switzerland had imposed wealth taxes only to be levied back later.

“I think what might be more promising in terms of raising more taxes effectively is a one-time wealth tax,” Stride told Times Radio.

“So I think it’s probably nearing the end of the spectrum of possible-stroke-desirable question marks rather than an annual wealth tax,” he said.

However, British media last month reported that Sunak told supporters that a one-time wealth tax would go against his Conservative Party values.

Sunak’s emergency spending and tax cuts are estimated to cost more than 280 billion pounds ($ 389 billion) in the 2020/21 financial year, burdening the country with the largest peacetime budget deficit ever.

He will announce his next spending and tax plans in a budget statement on March 3.

A group of three economists, including UK Treasury advisors, published a report in December recommending a one-time tax on assets including property as a way to raise £ 260 billion.

Estimates by the Wealth Tax Commission are based on taxes that apply to any individual with an individual wealth of over £ 500,000 – or £ 1 million for a spouse – and are charged 1% a year for five years.

Raising total revenue through more traditional taxes would require major hikes in income and value-added taxes that British Prime Minister Boris Johnson set aside before the 2019 election victory, the commission said.

The Parliamentary Finance Committee has no formal role in proposing economic policy decisions.

It aims to publish a report on wealth tax before Sunak’s budget statement next month.

On Monday, he published a report urging the government to set criteria on how and when to lift COVID-19 restrictions on the economy as well as modeling to show the economic costs and benefits of such restrictions.

Johnson will this week assess how quickly Britain can get out of its lockdown but the death toll and number of hospital admissions are still too high, Health Secretary Matt Hancock said on Monday.

($ 1 = 0.7200 pounds)

Written by William Schomberg; editing by Sarah Young / Guy Faulconbridge

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Italy

UPDATE 1-Bank of Italy says the country needs cohesion to grow, cutting debt | Instant News

February 6, 2021 NewsDesk

(Adding details, quotes)

MILAN, February 6 (Reuters) – Italy’s central bank on Saturday called for cohesion in a country struggling with a government crisis, saying it was critical to revive growth and reduce public debt driven by the coronavirus pandemic to levels last seen after the War. First World. .

“We cannot cultivate the illusion that public debt can increase indefinitely,” Bank of Italy Governor Ignazio Visco told the Assiom-Forex annual conference.

Italy’s public debt is expected to be close to 160% of domestic output by the end of this year, posing major challenges for an economy that has stagnated over the past decade.

“Italy must now find the cohesion it needs to get back on track,” said Visco.

After the collapse of the coalition government led by Prime Minister Giuseppe Conte, Italian President Sergio Mattarella has asked former head of the European Central Bank Mario Draghi to form a new government.

But the country’s biggest parties are still weighing whether to support him, with mutual vetoes blocking their path to power.

Visco said Italy cannot waste the opportunities the EU pandemic response provides.

Reporting by Valentina Za and Stefano Bernabei; Edited by Alison Williams and Ros Russell

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Brazil

UPDATE 1-Brazil’s government debt ends in 2020 at a record high of 89.3% of GDP | Instant News

January 29, 2021 NewsDesk

(Adding details)

BRASILIA, Jan 29 (Reuters) – Brazil’s national debt and public sector deficits ended last year at record highs, central bank figures showed on Friday, while a sharp drop in the cost of official borrowing pushed interest payments as part of the economy to historic lows.

As the COVID-19 pandemic devastates Brazil’s public finances throughout the year, government debt in December amounted to 89.3% of gross domestic product, more than economists predicted and a record high.

The public sector deficit in December excluding interest payments was 51.8 billion reais ($ 9.5 billion), the central bank said, close to the median estimate of 51.5 billion reais in a Reuters economist poll.

Despite worsening public finances, the 2020 deficit was narrower than the government’s forecast and debt was lower than many economists had expected, due to the economic recovery in the second half of this year.

The annual primary deficit was 703 billion reais ($ 129 billion), or 9.5% of GDP. The government’s latest estimate is for a deficit of 844.2 billion reais, or 11.7% of GDP, although the Ministry of Finance has indicated the deficit could be closer to 800 billion reais.

The figure shows that the central government’s main deficit of 745 billion reais was offset by surpluses in local government and state-owned enterprises.

The nominal deficit in December including interest payments widened to 75.8 billion reais, the central bank said, resulting in an annual deficit of 1.02 trillion reais, or 13.7% of GDP.

While debt and borrowing swelled as the government spent large sums of money to protect people, businesses and jobs, the record low interest rates meant that interest payments as a share of GDP fell to 4.22% from 5% the previous year, a series low.

In nominal terms, last year’s interest payments fell to 312.4 billion reais from 367.3 billion. ($ 1 = 5.45 reais) (Reported by Jamie McGeever; Editing by Hugh Lawson)

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New Zealand

New Zealand says government finances have improved after containing the coronavirus | Instant News

January 29, 2021 NewsDesk

FILE PHOTOS: A sailboat can be seen in front of Wellington’s Central Business District (CBD) in New Zealand, 2 July 2017. REUTERS / David Gray

WELLINGTON (Reuters) – The New Zealand government said on Friday that its finances were in better shape than expected, as the deficit and debt figures came in lower than expected last year after the coronavirus outbreak crippled the economy.

Tough lockdowns and geographic isolation are helping New Zealand eliminate the coronavirus within its borders and reopen the domestic economy. It ranks above the COVID Performance Index of nearly 100 countries released this week for the handling of the pandemic.

The government’s operating surplus before gains and losses (OBEGAL) was in a deficit of NZ $ 4.3 billion ($ 3.09 billion) in the five months ended November 30, he said in a statement on Friday, which was NZ $ 1.9 billion. better than expected in last year’s half year update.

Net core crown debt was NZ $ 99 billion, NZ $ 0.9 billion less than estimated.

“This country is in a stronger fiscal position compared to other developed economies, and we will prioritize our spending carefully to strike a balance between short-term needs and long-term requirements,” Treasury Secretary Grant Robertson said in a statement.

The Pacific Island nation has tightened its borders even further this week after reporting new positive cases of the South African variant of COVID-19 in communities linked to quarantine facilities.

There were no new community cases as of Friday, health authorities said.

Meanwhile, a luxury yacht, Le Laperouse, has been detained outside New Zealand waters because most of its crew were denied visas, authorities said.

Reporting by Praveen Menon; editing by Richard Pullin

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Brazil

UPDATE 2-Brazil posted a 2020 primary budget deficit of 10% of GDP | Instant News

January 29, 2021 NewsDesk

(Added Minister of Finance’s comment)

BRASILIA, Jan 28 (Reuters) – Brazil reported a record primary budget deficit of 743.1 billion reais ($ 138 billion) last year, the Treasury said on Thursday, as crisis-fighting spending saw total spending jump by a third and an economic slump hitting revenues .

Although the annual deficit is an uncontrollable record, both in nominal terms and as a share of gross domestic product, the deficit is below the government’s latest official estimate of 831.8 billion reais and below indications from Finance Ministry officials that it may be just under 800 billion.

The Treasury Department said last year’s deficit was a record 10% of GDP. That’s less than the 11.5% estimate by the government last month. The 2019 primary deficit reached 95 billion reais.

Finance Minister Bruno Funchal said 2021 would once again be “very challenging”, but insisted that the government would not breach spending limits, its main fiscal rule that limited public spending growth to the previous year’s inflation rate.

“It will be a very complex exercise, but one where we have to maintain fiscal discipline and limit spending,” Funchal told reporters at an online press conference.

The December deficit excluding interest payments was 44.1 billion reais, larger than the median estimate of 35.7 billion reais in a Reuters economist poll.

Net income in December fell by more than a third in real terms to 131.6 billion reais from the same month a year earlier, while net income during the calendar year fell 13% in real terms to 1.47 trillion reais, the Ministry of Finance said.

Expenditures in December were 18.7% lower than the previous year’s 175.7 billion reais. But over the course of the year, spending jumped 31% in real terms to 1.95 trillion reais, almost entirely due to measures aimed at mitigating the COVID-19 hit for individuals, businesses and local governments, the Ministry of Finance said.

Last year, major expenditures for dealing with the crisis totaled 539.6 billion reais, of which 293 billion reais were used for the emergency income transfer program to the poor which ended on 31 December. ($ 1 = 5.40 reais)

Reporting by Jamie McGeever and Gabriel Ponte Editing by Alison Williams

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