Treasury Minister Alfred Cannan pushed back against government critics as he unveiled his ’budget of substance’.

The minister said a stronger than expected economy had given the island a Budget boost for 2018-19.

He announced increased funding for frontline services, a further increase in the personal income tax allowance, and a redrawn capital programme that includes a replacement Castle Rushen High School.

He also unveiled long-held plans to introduce pension freedoms.

Mr Cannan told Tynwald: ’This is a budget of substance for an island of substance.

’We are investing in the Isle of Man’s future with confidence by pursuing progressive, affordable and sustainable policies to help all sectors of the community.

’We are putting money back in people’s pockets.’

The minister had strong words for government critics.

’There are those in society who want the government and the island to fail,’ he said as he opened the Budget debate on Tuesday.

’They talk us down, they talk their island down, they talk business and opportunity down, they talk success down, they talk living standards down, they talk public finances down, they simply talk failure.

’Well I have news for them.’

He reeled off a list of figures that he said refuted their claims:

’Current year income tax receipts are up £13m; public spending on key services and projects is up £13.8m; jobs and job opportunities are up - 280 new jobs created. Number of taxpayers in employment up by 733.

’Personal allowances are up by £750; the fiscal plan is on course and delivering; we are providing more support yet again for working families; we are giving more money to the NHS.

’We have already taken action on water, electricity and sewerage pricing; we have redefined and laid out a stronger programme of capital spending creating better public services and jobs and investment into our society.

’We have refocused our welfare spending, delivering better value for hard-pressed taxpayers and more support for those who genuinely need it.’

Last year, the structural deficit was forecast at £79m, met by £50m from interest from reserves and £30m from the reserves themselves.

But thanks to the strength of the economy, with a record number of people in work, income tax receipts up and fewer people claiming benefits, the deficit is now estimated at £39m - £40m less than expected.

This current year, the government posted a £18m surplus, £15m better than budgeted for, even after including this year’s £9.5m supplementary vote for the Department of Health and Social Care.

Income tax receipts had been better than expected, he said.

This next financial year, Treasury is forecasting a £10m surplus.

Last year, Mr Cannan announced an unprecedented £2,000 increase in personal income tax allowance, lifting 3,300 out of the tax net.

This year, he’s raising it again, by £750 to £13,250, lifting 1,700 people out of the tax net and making the remaining taxpayers up to £150 a year better off.

Child benefit and employed persons’ allowance will both increase by 3.3%. The basic state pension will rise by 3%.

An additional £13.8m has been allocated to spending on essential public services, including an extra £5.5m for the cash-strapped DHSC and £1.1m to address the deterioration of the roads network.

As part of that, Mr Cannan announced £1.5m extra funding for pre-school credits.

This will enable funding for children to attend privately run pre-schools for 20 hours per week during the academic year and means pre-school credits have risen from £1,700 per child to £3,420.

’Intervention in early years produces benefits for children, their families, the communities in which they are located and society as a whole. This is more good news for our working families,’ Mr Cannan said.

Aside from these extra targeted payments, department budgets are more or less at standstill.

Over the next five years, there will be £428m programme of capital funding including a new Castle Rushen High School, refurbishment of the swimming pool at the National Sports Centre and construction of a new Liverpool landing stage for ferry services.

Mr Cannan also confirmed the 1% cap on pay rises would stay in place.

’This means that should pay awards be made at a level over and above the cap, departments will need to find savings elsewhere within their allocation.’

But he said the better than expected results provided more flexibility to direct some additional spending - and if the strong economic performance continues, there was a prospect of the pay cap rising to 2% from 2019-20 onwards.

The minister also appeared to make a pre-emptive strike against moves, due to be made by David Cretney MLC later in the Tynwald sitting, to create a position of elderly people’s champion.

’Let me say this to the Honourable Member who purports this government does not care about the elderly in our society,’ said Mr Cannan.

’State pensions up 3%, personal allowances up, Income Support up, nursing care allowances up twice in two years and also you can apply the same to our working families: personal allowances, pre-school credits, employed persons’ allowance, child benefit, child care support - all up.

’Across our diverse island our people and this government are meeting and dealing with our challenges in a responsible, focused and sustainable manner. We are building the pillars of success and sustainability for many years to come.’

Tynwald voted in support of Mr Cannan’s budget, 20-4 in the House of Keys and unanimously in the Legislative Council.

Those against were Liberal Vannin leader Kate Beecroft (Douglas South) and party colleague Lawrie Hooper (Ramsey), plus Julie Edge (Onchan) and Speaker Juan Watterson (Rushen).