Chapter 98 Revenue and Budget

Regarding the government's development report, Carlo is actually more interested in the Spanish government's fiscal report.

After all, whether it is reform or construction, a lot of pesetas are needed. If you don't pay attention to the government's financial situation, you may not know when the country will go bankrupt.

Regarding the government's financial situation, Prime Minister Primo actually has a lot to say.

"Your Majesty, according to the 1870 fiscal report compiled by the Ministry of Finance, our economic situation is relatively good, and it is expected to maintain a relatively stable growth in 1871." Prime Minister Primo smiled and seemed to relax a little when he mentioned the economic situation in Spain.

Economic development is always a chain of links. Although it seems that the government has reduced taxes on farmers, after farmers have money, whether they deposit it in banks or spend it, it can also stimulate Spain's fiscal growth.

In addition, with the various construction projects in Spain, many jobs above the per capita income level have been added, which have been welcomed by many Spaniards.

At present, the most popular are the workers in the steel mills. Although the steel mills are hard, they really make money.

Apart from other things, Carlo's integrated steel mill alone recruited more than 400 workers in 1870, and there will be more in Spain.

As people become richer and richer, their consumption level will naturally increase steadily. People's consumption can also stimulate the development of all walks of life, and Spain's economy will naturally rise.

If Spain during the reign of Queen Isabel was more like a pool of stagnant water, turbid. Then Spain now is more like living water connected to the river, because the various constructions advocated by the government and the royal family are gradually revitalizing the entire economic system.

Carlo nodded, looking attentively.

The royal family alone has made a lot of money during this period, and the government's fiscal revenue should also have increased a lot. After all, the royal family has become a major taxpayer of the government so far, and the taxes paid to the government in 1870 were as high as millions of pesetas.

"According to incomplete statistics, our country's GDP in 1870 was about 6.1828 billion pesetas, an increase of about 1.5% compared to 1869.

Fiscal revenue was about 352.48 million pesetas, accounting for about 5.7% of GDP. Our fiscal expenditure reached 412.8 million pesetas, and the fiscal deficit was as high as 60 million pesetas.

However, because we issued national debt and received war reparations from Morocco, we were barely able to make up for our fiscal deficit." Prime Minister Primo handed Carlo a detailed report on Spain's finances and explained by the way.

It is also the king's right to understand national development. Primo naturally would not refuse Carlo's understanding of the country's situation. After all, a king who is indifferent to state affairs is not a good thing.

"Fiscal deficit of 60 million pesetas?" Carlo had a headache. Originally, Carlo was in a good mood when he heard that Spain's total fiscal revenue was as high as 352.48 million pesetas.

But after hearing that the fiscal deficit in 1870 alone was as high as 60 million pesetas, Carlo's mood was not so good again.

60 million pesetas! Converted into pounds, it is nearly 2.3 million, which is definitely a huge sum of money.

"Where did the 60 million pesetas go?" Carlo asked hurriedly.

No kidding, the total assets of the royal family have not exceeded 60 million pesetas so far. Even the total savings of the Royal United Bank so far barely reach this number.

The Spanish government's fiscal deficit in one year is as high as 60 million pesetas. Doesn't this mean that in just one year, the government's losses are equivalent to the total assets of the royal family?

Primo had anticipated Carlo's inquiry. He was not panicked at all when he heard the question. He smiled and explained: "Your Majesty, our major expenditures currently have three items, namely military expenditures, which account for 25.1% of total fiscal expenditures, and about 103.6 million pesetas are spent on military expenditures each year.

The remaining two items are railway construction and industrial construction.

In 1870, we built more than 500 kilometers of railways and 4,000 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%, and our expenses in transportation construction are as high as 95 million pesetas.

Although industrial construction is not so exaggerated, our funds for purchasing means of production, building industrial bases and encouraging private enterprises from abroad are also as high as 70 million pesetas.

Adding other expenses such as education and medical care, as well as the salaries of government employees, etc., 412.8 million pesetas are the result of the government's many savings."

If Spain wants to achieve reform and industrial expansion, it is impossible to achieve it without investing a large amount of money.

Spain's industrial technology is already backward, and it needs to purchase a large amount of industrial equipment and related scientific and technological information from abroad.

At the same time, building factories, laying production lines and recruiting workers all cost money, which is why the Spanish government's fiscal expenditure remains high.

However, all this is rewarding. At least in Primo's view, these expenditures are expected to bear fruit in the next three years and affect Spain's economic development.

The various factories and enterprises that have been continuously blossoming in Spain during this period alone are destined to usher in a period of stable growth in the future.

This is also the reason why Primo is willing to spend so much on government expenditures, because there will be rewards for every effort, and the funds spent will continue to return to the government in various ways, and will also allow the government to earn more in the future.

Hearing Prime Minister Primo's reply, Carlo nodded, which was considered to dispel his doubts.

Although Spain does not have a large-scale navy, its military expenditure is also not small. In particular, in 1870, it experienced the Cuban War of Independence and the Carlos Rebellion, and the military expenditures spent on the two rebellions were not small.

In addition, the Spanish government needs to maintain an army of more than 100,000 people, so the military expenditure is actually not much, and it is already within a reasonable range.

Fortunately, the compensation from Morocco basically wiped out Spain's fiscal losses in 1870.

Coupled with the loan from the Italian government and the total fiscal revenue for the whole year of 1871, the Spanish government will still be very confident in dealing with new construction and expenditures.

In the final analysis, it was because of the independence activists in Cuba and the Philippines that Spain had to maintain an army of more than 100,000 people.

After all, these two regions not only love independence, but are also very far away from the Spanish mainland. Every time a rebellion is suppressed, the government has to pay a heavy price. No matter what the final outcome of the war is, it is actually a loss for the Spanish government.

Carlo nodded and continued to ask his own question: "Is the available fiscal budget for next year enough? If the fiscal budget for next year is still facing huge losses, I am afraid that no one will come to help us fill the gap."

Prime Minister Primo had actually considered this issue a long time ago: "The current available fiscal budget of the government is close to 150 million pesetas. With the fiscal revenue of next year, it is no problem to continue our construction.

There is hope that 1871 will be a peaceful year. If there is no war, our military expenditure should be reduced to about 75 million pesetas.

The reduced military expenditure 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 fiscal needs in the new year."

Although Spain's fiscal revenue is as high as 352.48 million pesetas, in fact, many government expenditures are fixed and basically cannot be reduced.

This is also the reason why Prime Minister Primo needs to be careful with millions of pesetas. If a project spends a few million pesetas more, the wasted funds of dozens of construction projects will be enough to drag down the Spanish government.

"Prime Minister Primo, since our fiscal budget is sufficient, the government's focus in the new year should continue to be on the construction of heavy industry, as well as more extensive literacy education and infrastructure including railways and highways. What do you think?" Carlo intends to put forward his own opinions on the use of the fiscal budget in the new year.

The fiscal revenue of 352.48 million pesetas seems to be a lot, but it is only about 65.21 million US dollars when converted into US dollars, and only 13.531 million pounds when converted into British pounds.

If this money is only used in a few key projects, it may be able to achieve certain results. But if you want to build a comprehensive and multi-point blossom, it is a bit too idealistic.

Carlo's purpose is also very simple, to influence the government to focus on the construction of heavy industry as much as possible, and the secondary goal is literacy education and infrastructure construction, and the others can be temporarily slowed down.

There is not much room for development in medical care and agriculture now. The land situation in Spain determines that the upper limit of agriculture is just like that, and it is a bit difficult to achieve self-sufficiency, not to mention the large-scale export of agricultural products.

Medical care is completely limited by the current technological situation. If the money is invested in medical care, it may not be recovered within ten years.

For the Spanish government, which is short of funds, these two projects can be temporarily abandoned for now, and the focus should be on more profitable heavy industry.

Of course, Carlo has the right to make suggestions on some of the government's work. Prime Minister Primo did not oppose Carlo's suggestions. He just didn't want Carlo to interfere too much in the government's work and impose his ideas on the government to implement.

"Your idea is the same as mine, Your Majesty." Primo nodded, and obviously recognized Carlo's idea: "For Spain now, the development of agriculture and medical care can be postponed for a while.

At present, the government will focus 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 enough budget, other construction can be postponed. At present, only heavy industry, education and infrastructure are the most important to us."

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