The Honorable Allan Bell, Treasury Minister for the Isle of Man, kept his long-standing tradition this morning by speaking to a sell-out crowd at the annual Isle of Man JCC Budget Breakfast, sponsored by ILS Fiduciaries.
Having had presented his ninth budget in Tynwald yesterday, Mr Bell said this was his most testing to date but that the Government had risen to the challenge of its revenue shortfall with a budget for change.
This was the first installment of a five-year strategy to rebalance the Government’s finances following the reduction in the Island’s share of VAT income and combines lower public spending, increased taxation and the use of reserves.
Main features of the budget include:
- A £37.1 million or 6.5% reduction in net revenue spending overall (but with no decrease in net spending on health and social care).
- Income tax higher rate for individuals to increase from 18% to 20%, raising £9.4 million.
- Implementation of a 1% increase in employee National Insurance contributions (approved by Tynwald in November last year), raising £7 million.
- £15 million transfer from reserves.
Mr Bell provided an engaging 70 minute presentation of the detail and thinking behind the budget. He shared anecdotes and insights into the budgetary process, strategy and the Isle of Man’s relationship with Westminster. He took questions from the floor for a further 15 minutes and many members took advantage of the opportunity.
One questioner asked when civil servants would be given training in budget management. Mr Bell’s replied that responsibility actually lies with elected officials. “Politicians have got to learn to say no; they are responsible for spending, not the public service,” he said. “In the past, Government has bought off problems as they arise rather than solving them. This approach is not sustainable and is no longer an option.”
Rich Davies, Chairman, Isle of Man JCC closed the event by thanking Mr Bell and sponsors ILS Fiduciaries. He said, “Despite our current challenges, the Isle of Man continues to be a great place to live and work. I have every expectation this will continue and foresee a bright future for the Isle of Man.”
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