This Is Guernsey

By Gemma Hockey

TOMORROW sees the announcement of Guernsey’s 2009 Budget, Charles Parkinson’s first as Treasury and Resources Minister.

Following on from Alistair Darling’s first as the UK’s Chancellor of the Exchequer, there are interesting comparisons, according to tax expert Graham Parrott, a partner at accountant Ernst & Young.

Mr Parrott said in both cases it was not an easy time to take over the helm of government finances after the previous incumbent had moved on.

‘This is the first budget of the zero-10 era and the backdrop to this week’s announcement is one of turmoil in financial markets, the global downturn and increased demands on public finances,’ he said.

He said this did not make it an easy task for Deputy Parkinson (pictured). Mr Parrott said there were some things we already knew about the Budget.

‘Personal allowances are announced a year ahead and those for 2009 have been frozen again. Other minor changes are already in place, for example reduced tax relief for life insurance payments. There are a number of the usual suspects that can be expected to make an appearance again.

‘Anyone who drinks, smokes or drives a car with a big engine, worse still all three, is unlikely to receive good news,’ he said.

He said islanders have been expecting, almost promised, increases in domestic Tax on Real Property for some time now and they have not materialised.

‘A Budget which takes place as far as it can be from an election may be the right time to do this,’ he said.

‘On the expenditure side, the review is likely to result in further controls on public expenditure, an area where the new Treasury minister is likely to find in the eyes of some he can never do enough.’

Mr Parrott said last year’s budget made interesting reading when it came to spending on capital projects. ‘This is not the time for giveaways, but nor is it likely we will see any new taxes,’ he said.

Mr Parrott said with the second stage zero-10 review not due for another three years, islanders should not expect significant changes as yet to a strategy that followed a significant period of public consultation. ‘There might however be a case for bringing this review forward,’ he said.

‘While none of us have crystal balls, there are some measures we know already and others we can expect. Mr Parkinson’s first Budget comes at a difficult time and whatever it includes it will affect all of us.’

Article posted on 6th November, 2008 - 2.29pm