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No tax rises in Budget
MORE WORK NEEDED: Eddie Teare MHK. PHOTO: John Maddrell JM120621 (54).
TAX rises appear to have been ruled out for next week’s Budget.
Treasury Minister Eddie Teare gave some clues as to the content of his Budget when he gave a presentation to the Roamin’ CoMin community in Ramsey.
He confirmed that three-year spending targets had been agreed for all government departments.
Health and Social Care will get the largest increases – and Community, Culture and Leisure and Infrastructure will get the biggest reductions in its allocations.
Individual ministers will explain the impact of these cuts.
The second VAT renegotiation has created a new shortfall of £75 million in public finances – on top of the £100 million plus from the first VAT grab – to deal with this the rebalancing strategy will involve the use of £31 million of reserves in the next financial year.
Some £90 million of reserves will have been drawn on by the time the rebalance strategy is completed in 2015-16.
Government spending rose by just 1 per cent in 2012-13 and staffing costs have reduced, with 400 posts and 300 staff lost since April 2010.
With the welfare bill growing at £12 million a year, Mr Teare says there is need to ensure benefits go only to those who need them.
And he warned the community meeting in Ramsey that there were further clouds on the horizon including the need to rebuild capital transfers, remove reliance on internal funds, finalise Customs revenue shares and deal with the impact of banking reform and the FATCA automatic exchange of tax information with the US and UK.
‘There is more work to do post 2015-16,’ he told the audience.
Summarising the position, he said the government has large deficit but is on target to remove it, spending would continue to be held down, but with spending protected on vulnerable groups and in Health and Social Care.
Meanwhile, latest figures shows that government reserves grew by 8 per cent in 2012.
The market value of the externally invested funds as at December 31 increased to £1,444 million up from £1,337 million in December 2011.
Mr Teare said: ‘We are delighted with the increase in reserves especially after the Eurozone uncertainties that affected financial markets in 2011.
‘Stock markets ended the 2012 on a positive note; with many major markets registering strong returns for what is still, admittedly, a lacklustre global economic background. Our appointed investment managers have continued to provide consistent returns on our reserve funds that are over the required benchmarks.’
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Weather for Isle of Man
Saturday 18 May 2013
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