AS THE  fallout from the proposed 2012 Budget continues, it is clear that this is one of the least popular packages presented by an island ‘chancellor’ and that people resent what they see as an attack on their incomes.

In particular, the increase on fuel and the hike in tax on real property is regarded as an assault on ordinary, hard-working islanders, particularly coming on top of other rises.

Treasury and Resources itself has played up the extent to which the States has started controlling its own expenditure but Professor Geoffrey Wood, who prepared the latest independent fiscal policy review for government, says that is somewhat misleading.

The reason is that the figures are flattered by additional revenue raised through fees and charges so that taxpayers get stung twice: once to maintain the department and secondly to actually use its services.

Add the impact of the the extra Budget measures, and clearly people are going to feel pain.

Figures published by the professor from Treasury and Resources and the Social Security Department show just how highly taxed islanders now are. Of all the money spent by government, 66% comes from the individual through personal income tax, personal indirect taxes and personal or self-employed contributions to Social Services. Add the employer contribution as well, and the amount taken from the individual goes up to 79%.

Businesses, by contrast, fund just 11% of the island’s annual expenditure, or 15% if corporate indirect taxes are factored in.

That should not be a surprise. A consequence of zero-10 was that more of the burden of paying for public services would be swung onto the individual – but it does ram home the urgent necessity for government to get smaller and leaner.

While islanders are getting squeezed – not an experience members of T&R are likely to feel – public sector payroll costs remain out of control as a result of what the department itself terms ‘incremental creep’, no performance-related pay and a pensions burden that can only be sustained by asking taxpayers for yet more cash.

The worst thing about this Budget is that it penalises ordinary islanders simply to prop up an unreformed public sector.