FEARS that public finances would suffer under zero-10 have been eased today. The new States, to be elected tomorrow, will have a surplus of £70m.
This is almost double what had been estimated when it was decided to scrap corporation tax from January and introduce the new tax strategy.
Measures to make up the shortfall included reducing public expenditure and replacing Tax on Rateable Value with Tax on Real Property with the hope that income tax receipts would remain strong. Figures presented to the Policy Council yesterday reveal that total revenue income was a record £365m. That is £26m. ahead of budget.
In addition, the States has also trimmed spending by £6m. to £295m. against a budget of £301m. The amount of income tax collected was up by more than 7% on budget at more than £137m.
Chief Minister Mike Torode, who is stepping down after a long career in island politics, said he was optimistic for the island’s financial future.
‘Last year was exceptionally successful for the States. I would say that this is the best launch pad we could have for zero-10,’ he said.
The surplus follows a bumper financial year in 2007.
Income was up in direct taxes from ETI, companies, banks – which paid £40m. – and individuals.
Indirect taxes raised 10% more than anticipated, mainly due to a significant increase in document duty receipts on property sales.
‘This ETI figure simply reflects the number of people employed and their rates of pay. We see it as evidence of a thriving economy,’ said Deputy Torode.
‘These figures mean that the next States will have a degree of flexibility in spending on capital projects and day-to-day spending, including wages, because this States has handled our finances very well, on the whole.’
Capital projects include the redevelopment of secondary schools with Les Beaucamps next on the agenda.
Another high priority project is the Castel Hospital.
Deputy Torode said that sensible control of public spending had been as important as economic growth in improving the States’ financial position over the last few years.
‘The focus of this last States has quite rightly been on maintaining a strong economy and these results are testament to the success of that policy,’ he said.
‘The next States will be able to focus on allowing the maximum number of people to benefit from this.’
The year-end results, which have been scrutinised externally, were presented to the fiscal and economic steering group last week.
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One Article Comment
Just looked at your figures against those in the 2008 budget published just five months ago
Just how much we can rely on the few figures given in today’s Press is open to doubt.
The budget figures for total income in 2008 (put to the States just five months ago) was £306million.
Yet, within a few months and days before an election we see the claim that income is £26million above budget at £365 million.. This cannot be for the current year but for 2007 when the budget figure for income was £351million.
So .how real is the £70 million surplus? And for what year?
There is a clue in the figures for cutting expenditure. The Press says “In addition, the States has also trimmed spending by £6m. to £295m.against a budget of £301m”
The 2007 budget accounts however already included this “new” non news. Have a look at page 4 of the 2008 Budget figure.
This looks more and more like a PR stunt.
Nothing really new and 2007 figures which we knew would have a windfall effect.