Revised estimates of government department incomes are realistic, says Treasury Minister Alfred Cannan.

David Ashford (Douglas North) put the estimates under the microscope in the House of Keys, asking why the forecast income over the next three financial years, included in this year’s Budget Pink Book, was lower than in the 2016 Pink Book. He also wanted to know if the predictions of subsequent income growth in some departments were realistic.

Mr Cannan said: ’We based our Budget on very realistic expectations and forecasts, so the answer to the member in terms of whether I think it is realistic and what we have put down in the Budget is, yes, I do think it is realistic, based on the information that we have currently got and used to base our forecasts on.

’Clearly, over the course of any given year, circumstances change, financial markets change, interest rates change, and therefore any changes could be reflected, were they to happen, in next year’s Budget.’

Mr Cannan said this year’s Budget Pink Book highlighted ’the fact that a number of changes have been made to the presentation of the revenue budget figures in order to make the position more transparent’.

He continued: ’This necessitated a restatement of the original 2016-17 Tynwald-approved Budget, with an overall reduction in gross income of £35.5 million and a corresponding reduction in the gross expenditure position.

’Therefore, the bottom line surplus figure remains unchanged at £294,000. The 2017-18 and future year forecasts are presented along the same lines as the restated Budget for 2016-17.’

The restatements related to the National Insurance operating account, to exclude the annual drawdown from the NI Fund, and the pensions account, to exclude employee contributions.

’The reduction in income and other taxes income for 2017-18 onwards compared to that presented in the 2016-17 Pink Book relates to the increase in the personal allowance announced in the 2017-18 Budget,’ Mr Cannan said.

’Although this has the effect of reducing the Budget level of income tax collected in 2017-18 by £8.8 million compared with 2016-17, subsequent years are expected to grow by 3 per cent per annum.’

Mr Cannan added: ’The forecast level of fees and charges for 2017-18 and future years has been reduced by £2.3 million to reflect a reduced level of income anticipated by departments across a number of areas, mainly the Department of Infrastructure, to provide more realistic income targets.

’This represents just under 2 per cent of the overall projected fees and charges income figure assumed in the 2016-17 Pink Book.’