The 2020 deficit, or the gap between what the States spent and what it earned though tax and other means, has now been estimated at between £25m. and £30m., and that includes the losses incurred by Aurigny.
In December last year the black hole was predicted to be £59m., but that has now been revised downwards because of a combination of factors, including higher than expected income tax receipts, strong returns on property sales, and committee under spends.
The economic performance was described as ‘stellar’ during yesterday’s States meeting, and the early signs for 2021 are that a robust rebound is possible if the virus remains under control.
To date the number of businesses which have submitted a claim during this second lockdown is lower than during the equivalent period last year.
A ‘significant percentage’ of businesses gave notice that they were opening up again from Monday this week.
Deputy Mark Helyar, the treasury lead for Policy & Resources, sounded upbeat that better times are ahead.
‘We don’t know what lies around the corner but this is very positive news for the Bailiwick and is testament to the patience and resilience of the public and businesses across all sectors.
‘With spring almost upon us and the weather finally showing signs of improvement, we hope that the economy will again recover strongly as we pass out of the current lockdown.’
Deputy Helyar said there was a strong platform to enter this year.
For instance, in terms of ETI, broadly income tax receipts, the collections in quarter four of 2020 increased by 2.8% compared to the same period in 2019.
The quarter four remunerations, an indicator which includes salaries, were just shy of 1% higher than the same time the previous year.
Some 12 of the island’s official 19 sectors paid out more in remunerations for quarter four 2020 than they did in quarter four 2019.
More detailed statistics will be published by Policy & Resources in the next couple of weeks.
Customs and document duty receipts were described as ‘exceptional’, and income tax receipts were said to have held up ‘much more strongly than anticipated’.
The amount of business support paid out by taxpayers reached £51m. last year, and over 2,700 businesses were helped by the grants and payroll co-funding scheme.
Deputy Helyar said that the tax review remained very much on the agenda, and initial proposals should come to the States this Autumn.
Questioned about why the word ‘austerity’ did not feature in his speech, Deputy Helyar responded that they wanted to enable a ‘fast and hard’ economic recovery.