P&R warns of tough decisions now or down the line
WHILE the Budget report makes much of providing support for islanders at a difficult time, Policy & Resources has made it clear that tough decisions will soon need to be made or next year’s Budget will be a harsh one.
The updated tax review is due to be published at the end of November, and in his foreword to the Budget, committee president Peter Ferbrache said that if its proposals to agree tax measures to address the deficit were not approved, the only alternative will be expenditure cuts in the next Budget, ‘maybe reductions of up to 10%’.
A prediction of a £33m. surplus for 2023 is made in the Budget, but £27m. of this is anticipated to come from the return on States investments – which this year was zero.
‘If this proves to be the case in 2023 or there is an investment loss, the operating surplus could easily become a deficit,’ said Deputy Ferbrache.
This emphasises how precarious the States’ financial position is becoming.’
Actions needed to be agreed soon to maintain a sustainable financial position.
‘Proposals will be put forward as part of the forthcoming tax review and decisions cannot be delayed any further. It is clear that small incremental changes to existing taxation will not address the challenges that are being and will be faced.
‘It is unavoidable – there needs to be a fundamental change in our taxation system giving a significant and ongoing upwards shift in the amount of revenue raised.’
This was not a can that could be kicked down the road, he added last night.
‘If we get nothing on our investment, or no net return on our investments, we’re going to be down to a surplus of £6m. It doesn’t take much for that to go from £6m. in the black, to a few million in the red.’
