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States of Jersey Approves Island's First 3-Year Budget

by Jason Gorringe,, London

15 November 2012

Jersey's legislative assembly, the States, has approved the territory's first Medium-Term Financial Plan, ushering in budgetary planning in the island on a three-year cycle.

In what is effectively a three-year Budget without tax proposals, the States agreed revenue, spending, and capital expenditure targets and allocations, until 2015.

The government explained that the adoption of three-year budgeting is intended to enhance the prudent management of the island's finances, to ensure that the government operates efficiently while maintaining an attractive, and predictable low-tax regime.

Namely, the States agreed:

  • Plans to invest a further GBP26m (USD41.2m) annual funding in Health and Social Services;
  • Delivery of the next phase of Comprehensive Spending Review (CSR) savings;
  • GBP56m for capital projects in 2013;
  • An additional GBP14m for Social Security by 2015; and
  • GBP5m for the Innovation Fund to boost business and create jobs through the 'Back to Work' programme.

In his speech on November 6 when he presented the proposed Medium-Term Financial Plan, Treasury and Resources Minister, Philip Ozouf, said:

“This is a significant change in the way we do things. We are not simply making an administrative change to how we plan our finances, we are taking an important step towards securing our island’s future. 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."

“It does so by making careful use of existing resources, by seeing through the final stages of the CSR and by setting out a flexible capital programme that can provide both improved services and fiscal stimulus."

“We are in a unique position to be able to achieve this level of economic stimulus without drawing on strategic reserves or incurring debt. It means we will be able to spend our time doing what matters - serving the community efficiently and providing better value for money.”

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

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