Chapter 98: Fiscal Revenue and Budget

Regarding the government's development report, what Gao Da was actually more interested in was the Spanish government's financial report.

After all, whether it is carrying out reforms or construction, it requires vast amounts of pesetas. If one does not pay attention to the government's financial situation, one might not even know when the country goes bankrupt.

Regarding the government's financial situation, Prime Minister Primo actually had a lot he wanted to say as well.

"Your Majesty, according to the 1870 total financial report summarized by the Ministry of Finance, our economic situation is relatively good, and we expect to maintain relatively stable growth in 1871." Prime Minister Primo wore a smile, and when mentioning Spain's economic situation, he appeared slightly more relaxed.

Economic development is always interconnected. Although it seems the government has reduced taxes on farmers, once the farmers have money, whether they save it in the bank or spend it, it can likewise stimulate Spain's financial growth.

Coupled with the various construction projects in Spain, many job positions above the average income level have been created, which have been welcomed by many Spaniards.

Currently, the most popular are the workers in the steel mills. Although steel mills are hard work, they truly pay well.

Not to mention anything else, the steel mills that Gao Da integrated alone recruited over 400 workers in the year 1870, and looking across all of Spain, there are only more.

As the public becomes increasingly wealthy, their consumption levels will naturally rise steadily. The public's consumption can also stimulate the development of various industries, and Spain's economy will naturally rise with the tide.

If Spain during the reign of Queen Isabella was more like a pool of stagnant, murky water, then the current Spain is more like flowing water connected to rivers, because the various construction projects advocated by the government and the royal family are gradually revitalizing the entire economic system.

Gao Da nodded, looking as if he were listening attentively.

The royal family alone has earned quite a lot of funds during this period, and presumably, the government's fiscal revenue should also have seen significant growth. After all, the royal family has become a major taxpayer to the government so far, paying over a million pesetas in taxes to the government in 1870.

"According to incomplete statistics, our country's gross domestic product in 1870 was approximately 6. 828 billion pesetas, an increase of about 1. % compared to 1869.

Fiscal revenue was approximately 352. 8 million pesetas, accounting for about 5. % of the gross domestic product. Our fiscal expenditure reached 412. million pesetas, with a fiscal deficit as high as 60 million pesetas.

However, because we issued national debt and received war reparations from Morocco, we were barely able to cover our fiscal deficit," Prime Minister Primo said, handing Gao Da a detailed report on Spanish finances and explaining it along the way.

Understanding national development is also a right that a king should have; Primo naturally would not refuse Gao Da's understanding of the national situation, as a king indifferent to state affairs is not a good thing.

"A fiscal deficit of 60 million pesetas?" Gao Da had a bit of a headache. Originally, upon hearing that Spain's total fiscal revenue was as high as 352. 8 million pesetas, Gao Da's mood had been quite good.

But after hearing that the fiscal deficit alone was as high as 60 million pesetas in 1870, Gao Da's mood was no longer very pleasant.

60 million pesetas! Converted into pounds, that is nearly 2. million, which is absolutely a huge sum of money.

"Where was this 60 million pesetas spent?" Gao Da hurriedly asked.

No joke, the total assets of the royal family have not exceeded 60 million pesetas to this day. Even the total savings of the Royal United Bank barely reach this figure.

The Spanish government's annual fiscal deficit is as high as 60 million pesetas; does this not mean that in just one year, the government's loss is equivalent to the sum of all the royal family's assets?

Primo had long anticipated Gao Da's inquiry. Hearing the question, he was not flustered in the slightest and explained with a smile: "Your Majesty, our major expenditures currently consist of three items: military spending, which accounts for 25. % of total fiscal expenditure, with approximately 103. million pesetas spent on military costs annually.

The remaining two items are railway construction and industrial construction.

In the entire year of 1870, we completed over 500 kilometers of railways and 4, 00 kilometers of roads. The construction costs of these railways and roads are also one of our major expenditures.

The expenditure of the transportation department is also as high as 23%; our costs in transportation construction reached 95 million pesetas.

Although industrial construction is not as exaggerated, our spending on purchasing production materials from abroad, building industrial bases, and encouraging private enterprises also reached as high as 70 million pesetas.

Adding in other expenses such as education and medical care, as well as the salaries of government personnel, 412. million pesetas is already the result of the government's repeated frugality."

If Spain wants to achieve reform and industrial expansion, it is simply impossible to achieve without investing large amounts of capital.

Spain's technology in industry is already lagging behind, and it needs to purchase a large amount of industrial equipment and relevant scientific and technical data from abroad.

At the same time, building factories, laying out production lines, and recruiting workers all require costs, which is also the reason why the Spanish government's fiscal expenditure remains high.

However, all of this has returns; at least in Primo's view, these expenditures have the hope of achieving results within the next three years and acting upon Spain's economic development.

The various factories and enterprises constantly blooming in Spain during this period alone destine Spain's economy to welcome a period of stable growth in the future.

This is also the reason why Primo is willing to have such huge government expenditures, because there is a return for every investment; these funds spent will continue to feed back into the government in various ways and will also allow the government to earn more in the future.

Hearing Prime Minister Primo's reply, Gao Da nodded, which dispelled the doubts in his heart.

Although Spain does not have a large-scale navy, military spending is also quite high. Especially in 1870, having experienced the Cuban War of Independence and the Carlist Rebellion, the military expenses for suppressing these two rebellions were not small.

Coupled with the fact that the Spanish government needs to maintain an army of over 100, 00 people, the military expenditure is actually not much and is already within a reasonable range.

What is fortunate is that the reparations from Morocco allowed Spain to basically wipe out the fiscal deficit of 1870.

Added to the loans from the Italian government and the total fiscal revenue for the entire year of 1871, the Spanish government still has the confidence to deal with new construction and expenditures.

When it comes down to it, it is because of the independence activists in Cuba and the Philippines that Spain has been forced to maintain an army size of over 100, 00.

After all, these two regions not only love to stir up independence but are also separated from the Spanish mainland by a very long distance. Every suppression of a rebellion requires the government to pay a high price; regardless of the final outcome of the war, it is actually a loss for the Spanish government.

Gao Da nodded and continued to raise his own questions: "Is the available fiscal budget for next year sufficient? If next year's finances still face a huge deficit, I'm afraid there will be no one to help us fill the gap."

Regarding this question, Prime Minister Primo had actually already considered it: "Currently, the government's available fiscal budget is close to 150 million pesetas, and adding next year's fiscal revenue, continuing our construction is no problem.

The reduced military spending can be used for the construction of railways and roads or industrial expansion, and can also be used to continue to popularize literacy education, which is basically enough to meet the government's financial needs for the new year."

Don't look at Spain's fiscal revenue being as high as 352. 8 million pesetas; in reality, many of the government's expenditures are fixed and basically cannot be reduced.

This is also the reason why Prime Minister Primo has to be meticulous even with a few million pesetas. If a few million pesetas are overspent on one project, the wasted funds from dozens of construction projects combined would be enough to drag down the Spanish government.

"Prime Minister Primo, since our fiscal budget is sufficient, then the government's focus for the new year should continue to be placed on the construction of heavy industry, as well as more extensive literacy education and infrastructure including railways and roads, what do you think?" Regarding the use of the fiscal budget for the new year, Gao Da intended to offer his own opinions.

352. 8 million pesetas in fiscal revenue looks like a lot, but converted into US dollars, it is only about 65. 1 million dollars, and converted into pounds, it is only 13. 31 million pounds.

If this fund is only placed on a few key projects, it might be able to achieve certain results. But if one wants to build comprehensively and have multiple points blooming, it is somewhat too idealistic.

Gao Da's goal is also very simple: to influence the government to focus on building heavy industry as much as possible, with secondary goals being literacy education and infrastructure; everything else can be delayed for the time being.

Like medical care and agriculture, there is not much room for development right now. Spain's land situation determines that the upper limit of agriculture is just like that; achieving self-sufficiency is already a bit of a problem, let alone large-scale export of agricultural products.

Medical care is completely limited by the current state of technology. If money were invested in medical care, I'm afraid it wouldn't necessarily break even within ten years.

For the Spanish government, which is relatively short on funds, these two items can be temporarily abandoned for now; eyes should be placed on the more profitable heavy industry.

Gao Da certainly has the power to offer suggestions on some of the government's work. Prime Minister Primo also does not oppose Gao Da's suggestions; he just does not want Gao Da to interfere too much in the government's work and force his own ideas onto the government to execute.

"Your thoughts are the same as mine, Your Majesty." Primo nodded, clearly somewhat approving of Gao Da's ideas: "For the current Spain, the development of agriculture and medical care can be delayed for a period of time.

Currently, the government's focus will be placed on the construction of heavy industry and railways, and the popularization of literacy education will also be promoted as much as possible.

Before Spain's finances have a sufficient budget, other construction projects can be delayed; currently, only heavy industry, education, and infrastructure are the most important to us."

Three thousand words for the first update, please support!

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(End of this chapter)