A preliminary draft of the Council of Majorca's budget for the year 2004 entails an increase of 29.21 percent over and above the spending allowance for this year. The rise is due to social services and sport being included. Miquel Angel Flaquer, head of the Council's economic department said yesterday that the 2004 budget is estimated at 211'660'056 euros, representing an increase of 47'850'000 on the figure for 2003. Amongst other features, Flaquer drew attention to the fact that in the last five years the Council of Majorca's budgets have grown by some 95 percent. He pointed to the high level of investment allocated to next year's spending levels, as well as the balanced debt that the Council will assume in 2004. With regard to the progressive increases in the budget, Flaquer commented that this growth entails recognition of the fact that the Council of Majorca has matured from being a large Town Hall to a Government. Over the last few years, it has been endowed with a large number of legislative powers. Flaquer also gave prominence to the money allocated to investment, some 23.16 percent of the total. He went on to describe the importance of investment as part of a wider overview of budget planning, claiming that such strategy and provision underpins an economy with a strong base. Flaquer reported that the most important investments will be allocated to the road network on Majorca, as well as the conservation of natural heritage, the acquisition and upgrade of public land and the creation of a new fire station in Alcudia. With respect to budgetary allowance for debt, the Council of Majorca's accumulated figure stands at 80 million euros. This represents an improvement on 2003, seeing that as a percentage of the budget, debt allocation will fall from 67.5% to 57.1% next year. Annual debt scheduled for 2004 will reach a figure of 23.9 million euros, representing 12 percent of a budget of 211.6 million euros.
This figure was described by Flaquer as totally acceptable as it is fair and adequate.
The Council aims to take advantage of currently favourable interest arrangements to maximise opportunity for the people of the Balearics.
The head of economy indicated that one of the principal problems facing the Council's budget planning continues to be the issue of external funding. This is due to the fact that 83 percent of income is provided by other institutions, such as the Balearic and central governments. The draft budget also takes into account reforms related to Tax on Economic Activity (IAE). Modifications to the law have meant a fall of 71 percent in income that the Council of Majorca receives from this area. Income from direct taxation has been reduced to 0.76 percent.
Nevertheless, the difference will be made up by central government, through specific means agreed at the time of the reform.
The Council of Majorca will not lose money through the change in law surrounding this tax, assured Flaquer.
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