Lee Penrose, director, client development at Grant Thornton comments on this year’s Manx Budget.

The Treasury Minister produced his third Budget of the current Parliament against hard and uncertain times in Europe and for the future.

The minister ensured that fundamental changes were (quite rightly) not on the agenda.

Amid uncertain financial and political times in the UK, the Isle of Man may be attractive to some in the future as a place to do business and making fundamental and anti-business changes now could have knocked the island’s attractiveness.

The opening five minutes of the Budget speech set the tone for the rest of his ’Budget for Confidence’ announcements with a continued increase in the tax-free personal allowance to £14,000 (a 5.6% increase) and a freezing of the 10% bracket, meaning that an individual earning £20,500 (at which point the 20% higher rate tax commences) will pay £650 in income tax. A married couple would pay £1,300 tax on the first £41,000 of jointly assessed income.

Mr Cannan and his team have clearly enjoyed the feedback from the Budget roadshows undertaken in December 2018 as there are many announcements which should satisfy many of the issues raised by the public during the minister’s island-wide tour.

These include: -

lAn extra £1.5m to be provided to the Department of Education in a student awards scheme to support Manx students who return to the island after completing their studies,

lNew Manx state pension to be introduced from April, 2019 at £184.15 per week,

lA 5% increase in child benefit,

lAn announcement that the public sector pension fund deficit is starting to move in the right direction and latest estimates suggest it may last until 2072 rather than the 2050s. Good news for many, but still far from self-funding,

lA £50 increase in the winter bonus,

lAn increase in the starting limit for national insurance contributions (NIC) and a NIC holiday/refund for employees moving to the island and students returning, worth up to £4,000,

lSignificantly increased capital spending on the NHS and over £3m extra for mental health capital projects,

lA £479 million, five-year capital investment programme, including a Douglas promenade walkway, facilitation work to develop the Isle of Man ferry terminal in Liverpool and to support the development of Jurby, a new telecoms strategy and a new landfill facility for problematic waste,

lThe Enterprise Development Scheme is to be revised in order so that it can apply to a wider range of applicants. A total of £9 million will be available to focus on job creation and strengthen the requirement for co-investment,

l£2 million set aside from the Economic Development Fund to develop the Airport Technology Gateway and the creation of a landscaped business park at the airport,

lAn expectation that the soft drinks levy will be introduced from April, generating £300,000 for health projects,

lAn extra £3.4m for the police force for extra officers to deal with anti-social behaviour services and drug forces.

All of these Budget adjustments need funding.

This has been possible due to an increased anticipated Budget surplus from £10m to £28m.

But more fundamental is the reason why this apparent increase in surplus arises, being an extra £10m from increased income tax receipts and £8m saving in benefits, including unemployment benefits. Both of these suggest increased employment, which is greatly needed going forward.