21 June 2006
New financial forecasts show that States finances are picking up and that instead of being in the red by 2011, the States has increased its revenue so that its books should broadly balance over the next five years.
The improved figures just released by Treasury and Resources, show that despite increased spending in essential areas such as health, social security and housing, the States finances should remain in credit over the next five year period.
The new forecasts have come as a result of a better than expected income from impôts (customs duties on alcohol, cigarettes, petrol and diesel) and stamp duties. They are around £7m higher than expected for 2005. Further analysis of the figures indicates that this improvement should be sustained and as a result, forecasts for both these income streams have been increased.
Treasury and Resources Minister Senator Terry Le Sueur said: “This information has been confirmed in the last few days. It demonstrates that the Council of Ministers’ cautious optimism and confidence about the state of our economy was justified. While I cannot claim that the increase in impôts duties is a reliable economic indicator, it gives an overall sense that the recent challenges we have faced have not affected our overall standard of living. Similarly, the increase in stamp duties, which was not forecast, shows that we have a healthy housing market. This we can say is a positive indicator that our economy is in fairly good shape.”
He added: “Financial forecasting is not a precise art and while healthier than expected, these projections confirm the need for GST and the other tax changes agreed by the States in the fiscal strategy, together with the over-riding need to keep States spending down.”
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