Jersey Fiscal Panel Publishes Report

by Jason Gorringe, Tax-News.com, London

02 December 2010

The Jersey Council of Ministers’ plan to balance the books is welcome but the States financial position remains 'extremely tight,' Jersey’s Fiscal Policy Panel says in its latest report, published on November 30.

Panel Chairman Joly Dixon said: “The Stabilisation Fund runs out in 2011, and even after the spending cuts and tax increases that have been put forward, the deficit is only just closed by 2013 under the most likely scenario. Given there are significant risks to both income and spending, we are concerned that the financial position is very finely balanced. Of particular concern is lack of a strong track record on controlling spending. We therefore strongly recommend that no actions be taken that will amend the draft Budget and make balancing the books more difficult than it is already likely to be.”

The government describes the proposal to run deficits that support the economy over the next couple of years as "broadly appropriate," provided that there is a clear and credible plan for the medium-term.

"The report therefore reiterates the panel’s guiding principles for fiscal policy, which are that it should have regard for economic growth, have a focus on the medium-term, and that the States should plan to run surpluses once the economy recovers to rebuild savings," the government stated.

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