This year’s general election was ’the last thing on our minds’ when the Budget was being prepared, Treasury Minister Alfred Cannan has told Business News.

Voters in the island are expected to go to the polls to elect MHKs for the House of Keys on September 23.

There had been speculation that tax rises could have been on the agenda to help pay for the cost of Covid-19.

But Mr Cannan announced in the Budget speech that ’now is not the time for tax rises. Instead our focus must be on continuing to support our economy and our recovery’.

The MHK for Ayre and Michael reiterated this message on Wednesday morning when he was the star attraction at the Isle of Man Business Network’s Budget Breakfast, sponsored by KPMG.

It was broadcast online and more than 300 people signed up to watch the live broadcast.

Business News was the only media outlet invited to attend the event at ELS’s Studio One in Cronkbourne, at which the virtual attendees submitted a stream of questions for the minister.

Business News asked Mr Cannan how difficult it was not to include tax rises in view of the fact that this had been feared among some experts.

He said: ’The important thing was to assess the overall impact of the pandemic.

’Bringing forward things like tax rises at this precise moment without a longer term strategic plan for example would have been the wrong thing to do.

’In any case our economy really has been built around a low tax environment. That has really sustained this island and created a lot of the economic opportunities that we see today.

’So one has to think very carefully about these things anyway.

’It will definitely be something that will be looked at but there is no immediate rush to change our tax structure at the moment.’

He was asked: ’Has this anything to do with this being an election year’?

He answered: ’Elections have been the last thing on our mind. This is a very serious situation that we find ourselves in at the moment and we need to keep entirely focused in terms of doing the right thing for the economy and our people.’

He was asked if the review of the national insurance system could turn out to be a sting in the tail for island residents and businesses.

He replied: ’No I don’t think so.’

He added it might lead to reforms next year ’if indeed that comes through as a result of the input from Tynwald, and from the public. There will be proper consultation about the national insurance fund, its purpose and what it should be funding.

’It is something that has not been looked at for decades, really since it started in the 1940s, and now is the time to look at it, particularly as it has been used in the way it has to support the nation in our hour of need in terms of the salary support scheme and the Mera (Manx Earnings Replacement Allowance) that has been paid out.

’As we see there is a forecasted net £74m deficit effectively on the national insurance.

’Having said that the national insurance fund still remains very much the crown jewels in our reserves.’

Asked about high net worths Mr Cannan said he was satisfied with what had been done over the past five years in ’redressing some of the balance’ of the tax that very high net worth individuals pay and that the tax cap is currently set at £200,000 per year.

[The tax cap is an upper limit on the amount of income tax a high net worth individual would be expected to pay].

’The next administration will have a chance to look at its overall tactics and its overall strategy plan for public finances but also for social reform and any other changes it wishes to make.

’There are lots of opportunities around but as I said I’m not going to get too hung up on tax.

’As I said it really needs to be part of a well thought out strategic plan.’

Asked how concerned he is about the possibility of an EU blacklist threat he said this is a conversation that has been ongoing for ’some considerable time’.

He said: ’We continue to engage very very closely with the international agenda in terms of taxation. It is going to be right at the forefront, I would have thought, of a lot of countries’ minds particularly as we come out of this pandemic.

’We will come out of this probably to a changed world from an economic and public finance perspective, across the globe.

’So taxation, global taxation, digitalisation, taxation of digital companies for example, all these are going to be right at the top of the agenda and it will be key to understand what is coming down the road and to see that we are properly geared up to meet the standards that are required.’

He was asked if he was disappointed that once again the speaker of the Keys, Juan Watterson had voted against the Budget.

He replied: ’No. I will say one thing, he is consistent.’

The business group’s spokesman Carrie Allen-Snell explained the event was held virtually because of logistics issues surrounding the uncertainty over the Covid-19 situation.

Robert Rotherham, partner at KPMG in the Crown Dependencies, said: ’We are pleased to be able to support the Isle of Man Business Network in these unusual times and to see this well-established and popular annual event continue.

lFour page Budget special, pages 25, 26, 27, 28