Adam I, Editor
SERKATIA – Today, the Ministry of Finance published its annual report for the 2017-18 financial year, which has shown that the recession and the budget deficit have both continued for a second year, albeit reduced. The GDP is now at £40.83, down from £50.58 last year, a recession of around 20%. Last year’s recession was over 50%, which means that the drop has at least been slowed significantly. The budget deficit was £21.74, compared with £44.68 last year.
The Ministry of Finance released the annual Treasury & Economic Reports earlier today.
The report blamed the de-activation of the Contributions Scheme for the prolonged poor financial situation. The Scheme, which once generated the majority of government revenues, was suspended in September 2017, and despite reforms put in place by the Public Finance Act 2018 in June this year, there are currently no active contributors. This has meant the government is fully reliant on company tax, which remains extremely low compared to even the most basic expenses. This year, there was only the bare minimum expenditure – renewing the empireofadammia.org.uk domain name – but despite this the deficit is still there. Alarmingly, civil servants have warned that unless the government begins raising more revenue soon, it could be forced to either shut down the national website or face bankruptcy within the next two years. The Treasury reserves, which two years ago stood at almost a hundred pounds, have now been depleted to just £18.
The inactivity of both the Contributions Scheme and publicly-owned companies such as Imperial Mail have meant that the private sector contributed 100% of the GDP this year. Capital Brewery has maintained fairly consistent, yet slightly reduced profits of £10.80. By far the biggest contributor to the economy was Adammic Investment Ltd., which reported annual profits of £30.03. Unfortunately for the government, this has not translated into tax revenues, due to the fact that Adammic Investment is reportedly having trouble paying its tax bill due to cash flow issues. Apparently, Adammic Investment currently owes the Treasury quite a fair amount in unpaid tax, which could go a long way to eliminating the deficit if it were paid.
With the report coming just weeks before the crucial National Election, the parties will no doubt be trying to spin the report one way or another. The government will likely be keen to emphasise the fact the deficit has been cut, both in absolute terms and as a share of GDP, that the private sector is on the rise and that the recession has been slowed. The government’s opponents, on the other hand, may be seeking an explanation as to why the government has failed to raise almost any revenue and has relied on its dwindling reserves to fund the national website. When the Budget was passed last December, it was expected that income-raising measures, such as the re-introduction of Contributions, would be implemented by the end of the winter, but this never occurred.
And, of course, what happens next for the Adammic economy? The report today criticised the Contributions Scheme as outdated, suggesting that it will never be taken up by citizens in the new provinces and that the old contributors in Greater Tytannia face practical difficulties in contributing now that the Treasury is located a hundred miles away. The recent introduction of the Sovereign Grant and the Imperial Bank give the government new tools with which to stimulate the economy and get it moving again, and spectators will no doubt be interested to see the party manifestos – expected to be released over the next couple of weeks – to see how exactly they plan to tackle the issue of healing Adammia’s struggling finances.