A PENSION fund for States employees is £40m. better-off because of decisions made by the Treasury department. Lyndon Trott will make the disclosure today as part of his 2008 Budget speech.
He will give the States a positive message, while warning of the dangers of exposing the island to the global credit crunch if members back delaying the introduction of zero-10.
Deputy Trott says that the budget is ‘a package that fosters continued prosperity for our community through sustainable economic growth and provides for investment in essential public services and infrastructure.’
The pension fund has benefited by investing more in equities.
Cigarette, alcohol and fuel duty all rise under the Budget proposals. Property tax increases target the beneficiaries of zero-10, with a four-fold increase for those in the regulated finance industries.
Deputy Trott will stress that the cost of motoring in Guernsey is substantially lower than other jurisdictions
‘The States of Guernsey will be levying less than half of the amount of duty per litre on fuel than the UK Government.’
He believes the over-riding theme of the 2008 Budget is planning for the future.
‘The 2008 Budget proposals deliver controlled, prudent and well thought out revenue- raising measures.’
The supertanker of States expenditure had been checked and turned, he said.
If it had continued to grow at the rate seen between 2000 and 2005, the 2008 non-formula led cash limits would have been at least £40m. more than recommended.
Those now before the States will see above RPI increase in the priority areas of Health and Education.
Treasury believes there will be between £30m. and £40m. to spend on a major capital project in the next term - a choice expected to be between Les Beaucamps, La Mare de Carteret School or mental health facilities
Late in 2008, the department intends to present another capital prioritisation report to identify projects that should be progressed by the States.
Deputy Trott said that with Guernsey’s economy stable, the time for introducing tax reforms was 2008.
Deputy Rhoderick Matthews will place one of a number of amendments in an attempt to delay change for a year.
‘Delaying the introduction of tax reform by another year will compromise Guernsey’s favourable position in global finance markets and could adversely affect business confidence,’ said Deputy Trott.
‘Especially at a time when there is concern amongst market analysts about the US economy slipping into recession, fuelled by the on-going global credit squeeze.
‘It is my department’s view that the island’s economy would be more vulnerable to such effects by delaying tax reform for one or more years and is likely to undermine business confidence in these uncertain times.’
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