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Jersey Plans First Three-Year Budget

by Jason Gorringe, Tax-News.com, London

26 July 2012


The Jersey government has launched a consultation seeking input on a new document that, for the first time, details at length the government's medium-term plan for the tax regime, revenue and expenditure projections, and allocations to government-funded initiatives, as part of efforts to ensure the territory's finances are more sustainable and resistant to external shocks.

The Medium-Term Financial Plan was presented to the island's legislative assembly, the States of Jersey, on July 23, 2012, but will not be subject to debate until November 6, 2012, to allow time for feedback from the Jersey business community, islanders, and the Fiscal Policy Panel.

The Plan has been launched on the back of proposals championed by the territory's Finance Minister, Philip Ozouf in June 2011, in which he called for the States budgeting period to be extended from one to three years, to fit better with the island's existing political cycle, which sees each Council of Ministers elected for a three-year term.

Announcing the proposals in June of last year, Ozouf explained:

“I am proposing that the current annual business plan and budget are replaced with one Medium-Term Financial Plan debate, to determine the tax and spending envelope for a period of three years. Then the traditional, annual budget will propose tax, funding and variations to expenditure within overall limits. As there will always be political priorities that arise within the three-year time frame, the law makes provision for an annual allocation of money for new political priorities."

“This change will provide greater control of States spending and certainty for departments over a period of time, while also retaining enough flexibility to manage emerging pressures and changes in priorities within overall spending limits. Departments will be given greater control over their budgets within the three years."

In announcing the consultation, the government highlighted that three-year budgeting is intended to provide better value for money by allowing government departments to plan ahead for service development and improvement, described as fundamental to a successful reform of the public sector. This change will provide flexibility and deliver efficiencies which will benefit the island, it said.

Launching the consultation on July 23, 2012, Ozouf said:

“This plan delivers growth in essential services, balanced revenue budgets in all three years and support for the economy, while maintaining the current system of taxation."

“At almost 400 pages long it is a detailed analysis and it represents the next (stage) in the States’ longer-term planning. I would like to encourage people to give as much feedback as possible during the extended consultation period. Comments and suggestions for improvement will be welcomed and we can make amendments can be made to the plan up to mid-October.”

TAGS: tax | fiscal policy | public sector | international financial centres (IFC) | budget | Jersey | offshore

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