Alex Allinson presented his first Budget to Tynwald this week and received backing from all but one MHK.
In the debate, Garff MHK Daphne Caine called the plan a gamble.
Dr Allinson said to this: ‘I’d say no, this is not a gamble. Treasury aren’t gambling.
‘Gambling involves risks and we are taking some risks I accept but these are firmly calculated risks.
‘Before we roll the dice we will reset all those risks on a regular basis so that we get this right.’
When asked if Treasury had a plan B if the assumptions it has made don’t come to fruition, he said: ‘I have no doubt that this Budget is the right thing to do at the moment, it is a necessary, pragmatic Budget, to deal with the current problems we have in terms of balancing expenditure and laying foundations for what will come, which is the delivery of the Island Plan and the economic strategy.’
The minister will return to Tynwald in July to give an update on how the situation is developing in terms of spending ‘but also in terms of our revenue so that if we do need to reset we can’, he explained.
Dr Allinson said: ‘I would advocate that there is not a plan B to be honest with you, staying the same as we are is no longer feasible.
‘In 2019 we had a perfectly balanced Budget but then the world changed and we need to change as well to meet those increasing demands.
‘We’ve seen seismic changes in the workforce. We’ve seen changes in terms of globalisation, and economic instability and we need to deal with that.
‘We must adapt and adjust to a new world and our place in it, which I believe has a bright future.’
Many MHKs who spoke in the debate took issue with the government’s raiding of reserves.
Douglas North MHK David Ashford, who delivered the last Budget as Treasury Minister, said that he promised the same move made last year wouldn’t happen again.
‘It concerns me we are looking at National Insurance Fund,’ he said. ‘What worries me is the NI Fund will start becoming the fund we go to for the health funding gap.
‘Will we every year be hearing the mantra, just one more year?
‘I can’t support the order for another draw down. We need to look at long-term solutions to fix the funding gap instead of temporarily papering over cracks.’
Dr Allinson said in response: ‘It gives me no pleasure at all to draw down on reserves.
‘We’ve tried to minimise it as much as possible but [drawing down] is the reality at the moment if we’re going to give the public what we’ve promised them in terms of world-class services.’
He added: ‘We have a funding gap there, we are bridging half the gap through revenue, half through the National Insurance Fund.
‘These reserves are there for a reason. We need to address that funding gap.’
bleak
One MHK labelled it a ‘bleak Budget’, which Dr Allinson disagreed with, saying it was ‘realistic’.
‘We are addressing and recognising some of the problems going forward,’ he said. ‘I don’t think anyone setting out, particularly now, with a Budget of 12 months could put their hand on their heart and say every single figure will be right in the end.’
The minister continued: ‘A budget at this point is just an estimate.
‘What we need to do is work with departments throughout the next 12 months and further to tweak, reset some of those assumptions, look at the actual spend and delivery as we go forward, to make sure that the money the taxpayers have entrusted in us is spent wisely.’
Concluding, Dr Allinson said that ‘permacrisis’ was the word of 2022, according to Collins, which means insecurity.
‘Describing something as a crisis reinforces idea it’s a short term problem,’ he explained.
He added that people have been using weather metaphors such as ‘perfect storm’ and ‘flood of need’, which indicate an emergency.
In response to this, the government has been providing one-off emergency policies that provide a temporary solution.
‘The Island Plan will change the way our economy works,’ he said.
The Budget will move the island away from crises and set it on five year plan to correct its deficit, the minister said.