Treasury Minister 2012 budget speech

09 November 2011

Today’s debate is taking place at a critical time for the world’s economy and for Jersey. The Governor of the Bank of England has said “This is the most serious financial crisis we’ve seen since the 1930s, if not ever.”

This chimes with comments from the President of the World Bank, who said last Friday “The world economy is still wobbling on the edge, and it could tip very quickly.”

The integrity of the European single currency union is under threat. Economic growth in the G7 economies is forecast to be less than 1% in the second half of 2011. Business and consumer confidence in the United States continues to fall as their government runs out of options to stimulate growth.

Closer to home, the UK is in the process of rebalancing its economy. The Bank of England has injected a further £75 billion pounds in a new round of Quantitative Easing to buy time and address the underlying problems of excessive debt and over-leveraged balance sheets.

In the past, market-determined exchange rates helped balance trade surpluses and deficits between countries facing economic downturns. However, now that many European countries have fixed exchange rates, we cannot expect a swift resolution to the current European sovereign debt crisis.

With regard to Jersey’s position, in October 2011 the report from Jersey’s Fiscal Policy Panel said:

“Future expectations for global economic growth have been revised downwards and the speed and extent of global recovery is now much more uncertain than before. This is likely to hold back Jersey’s recovery, although it is hard to quantify the effects.”

The Fiscal Policy Panel has now revised its central estimates for economic growth in 2012 to between minus or plus 2%. the panel's advice on what we should do is clear:

We “should be ready to support economic activity without weakening States finances."

This is what we have been doing and it is what this Budget will continue to do.

The last 3 years

In 2009 I had the difficult job of reporting to the States a forecast recurring deficit of up to £100 million pounds by 2013.

This deficit was calculated to include not only the effect of the global downturn but also restoring appropriate contingencies for unforeseen expenditure and realistic spending estimates. This meant our public finances were in danger of being destabilised.

Unlike certain Governments, who are now in serious difficulties, we did not take the easy path. We were transparent, we identified the problems, we took proper independent advice and we faced up to dealing with our deficit. Together we resolved to tackle it with a 3-part plan:

Reducing spending by £65 million pounds over 3 years
Boosting economic growth through a fiscal stimulus package
And raising taxes by £35 million pounds to close the gap

So, what progress have we made?

1- CSR savings

All Departments are delivering and we have collectively exceeded our targets for this year. The approval by the States of the 2012 Business Plan means we are on course to achieve our target of £33 million pounds a year by 2012. Savings of a further £32 million pounds are planned for 2013.

I want to repeat my thanks to the Independent Reviewers who gave of their time and experience to serve the Island. I also want to recognise the Corporate Services Scrutiny Panel’s role in assisting with the Comprehensive Spending Review.

Their latest report has some constructive observations that the CSR is about more than just efficiencies. It is a key part of the fundamental reform of the public sector that we have begun in this Administration and must continue in the next.

2- Boosting the economy

Members approved the plan to stimulate the economy with the targeted use of £44 million pounds of Fiscal Stimulus cash. It is encouraging that, through Advance To Work, more than 200 young people have found employment.

A further 21 young people are now in States’ apprenticeships and 80 long term unemployed people are back to work through the Advance Plus programme.

Fiscal stimulus money has kept Jersey going. More than that, new investment has helped Jersey Hospice, Durrell, the Opera House and other local third sector bodies in their outstanding work.

States Members can be proud of the lasting legacy of essential housing and infrastructure improvements.

3 - Tax

In last year’s Budget Statement I promised that we would develop new tax policy in a number of areas. I am pleased to report significant progress has been made.

The Tax Policy Unit issued its report on the outcome of the Business Tax Review in September. It came as no surprise that the consultation response was clear, that we should maintain zero/ten. The zero/ten model provides fiscal neutrality that is fundamental to our financial services industry while maintaining tax revenues at a competitive rate.

A review of alternative corporate tax regimes, including an economic impact analysis, found that moving to an alternative regime would, in most cases, reduce tax revenues and damage Jersey’s reputation for stability and fiscal independence.

While it has sometimes been difficult, I have maintained the consistent view that zero/ten was absolutely fundamental to Jersey’s positive economic future.

The States has approved legislative amendments to remove those elements of our tax legislation that were considered harmful by the Code Group.

On 13 September, the Code Group approved our zero/ten tax regime and confirmed that our rollback proposal would remove the harmful element of our regime. This will be formally tabled at ECOFIN next month.

The fact that we have secured zero/ten is excellent news for Jersey. It brings certainty and stability to the business community and gives us significant advantage over our competitors, providing the foundation for growth.

The Assembly also approved a new 1(1)(k)tax regime, designed to attract high net worth individuals and their wealth to Jersey. This will provide the opportunity to attract new entrepreneurship and new jobs.

Inward investment creates valuable economic growth and employment but I will continue to keep under review the equity and fairness of the present arrangements.

So where have these measures brought us today and what have they achieved?

Strong position

We have maintained an exceptionally strong Balance Sheet

property, in its current use, is valued at £1.7 billion pounds - more if we consider development potential
infrastructure, including roads, sewers, harbours and the airport, are valued at a further £1 billion pounds
utility companies that are wholly or partly owned by the States have a book value in excess of £254 million pounds, more if they were ever sold

Pensions well-funded

Most countries meet pension costs from current revenues. In contrast, Jersey has both a Social Security Reserve of £838 million pounds to support the future costs of an ageing population, and a Health Insurance Fund with a balance of more than £80 million pounds.

In addition, the States has fully invested pension funds for all public sector workers, which generate returns and reduce the cost to the taxpayer.

Having said this, I do not underestimate the difficulty of providing for an ageing population.

Nor do I underestimate the difficulty of funding public sector pensions when people are living longer and investment returns are falling.

There is much we can learn from the findings of the Hutton Inquiry into UK Public Sector Pensions. Officials are working with stakeholders to develop options for change that the new Council of Ministers and States Employment Board can consider.

We also have a safety net of nearly one year’s spending set aside in our Strategic Reserve. Additionally we have other substantial cash balances and reserves now receiving more active management in the Common Investment Fund.

The balance on the Consolidated Fund, which improved in 2010, comfortably covers the deficit of £19 million pounds in 2012 with a return to balanced budgets in 2013.

We will see the Consolidated Fund increase to the FPP target of at least £20 million pounds by 2014.

We have also been able to retain a balance of £10 million pounds in the Stabilisation Fund, a much better position than we thought possible a year ago.

This strong position, brought about by past prudence and the measures we have taken over the last 3 years, is why Jersey is well placed to withstand current global turbulence and to maintain its resilience into the future.

Securing Jersey's future

This has been perhaps the most difficult time the Island has faced since the Second World War and probably the most difficult time a Treasury team has faced. During the recent elections, many Members have faced challenges from Islanders whilst canvassing.

Members will quite understandably have asked themselves whether the actions we have taken over the last three years were necessary and if there really is a prize for such prudence.

Sir, we all know how hard our fellow Islanders are finding this current climate. For many local households, particularly those struggling with employment issues, talk of strong public finances does not mean much. Islanders, particularly those on low and middle-incomes, have faced a double squeeze.

Firstly, a squeeze on their income from the necessary changes to our tax structure. Secondly, from the effects of the global financial crisis.

I understand that tax increases have had an impact on everyone. We have been through a phase of fiscal tightening and this has been tough. The Assembly supported the view that these were the prudent steps to take. Borrowing or spending our reserves on financing current expenditure would not have been sensible.

Many nations are now learning the harsh consequences of following such a path. I believe future generations will look back on this period and be grateful that we in this Assembly faced up to our responsibilities. We did forecast the problems ahead, and unlike many other governments around the world, we did something about it.

In the not too distant future, I am confident that all Islanders will benefit from our prudence.

I would like to add my personal thanks to Islanders and Members for accepting the difficult decisions. I believe the actions we have taken will pay a significant long term dividend.

2012 and beyond

Now that we have taken these tough measures, what challenges are facing us in 2012 and beyond?

If the weakening in the large economies continues, future rises in UK interest rates will be delayed until at least 2013.

While low interest rates historically were a powerful economic stimulus, they do have an affect on banking profitability.

Company tax revenues from the banking sector will not therefore recover until rates increase.

However, there is good news locally.

Retail sales

I understand that Jersey retailers are facing competition through internet sales and increasing competition. We are all concerned about the future of on-line retailing, however local retailers have already been reshaping their businesses.

I found it encouraging that the Statistics Unit reported that in the first 6 months of 2011 retail sales volumes were around 4% higher than a year ago and footfall has increased.

Employment

While unemployment has risen from previously low levels to more than 1,300, our unemployment as a proportion of the total job market is significantly lower than most jurisdictions. And it is encouraging that the number of people actually in work in June this year stood at the highest level ever recorded.

Inflation

It is also encouraging that inflation in Jersey remains lower than in the UK. The latest forecasts from the Economics Unit suggest that underlying inflation will be lower for the coming year, at 3% to 3.5%. I cannot emphasise enough how important it is for high inflation not to factor into wage and price decisions.

This would damage the Island’s competitiveness, our local economy and future job prospects. The States has underlined its own commitment to avoiding a wage-price spiral.

Economic position

All governments need to work hard to maintain their economic position. We must be innovative and diversify our economy to improve the competitive position of all Island businesses in all sectors of the economy.

Improving economic performance will secure well paid jobs for Islanders and I would like to explain how this could be achieved

Continuing to enhance our reputation internationally helps. 3 years ago we decided to focus our efforts on emerging and developing markets in Asia Pacific and the Middle East, the areas of the world that will be the engine of future growth.

In the last 18 months I was privileged to lead trade delegations to Shanghai, Mumbai and Abu Dhabi, to create new relationships at a political level. These cities are among the fastest growing in the world, and our new offices, funded in part by Fiscal Stimulus money, are already winning new business, creating jobs and securing future growth.

Ministers also led a delegation to Israel where there is a huge potential for Jersey to create new business and build on existing business relationships. Latin America is our next target market and we intend in the coming year to focus on developing new opportunities there.

We punch above our weight and this year, Jersey continued to be ranked as on the the highest rated offshore international finance centre. Jersey climbed into the top 10 locations in the world for wealth management and private banking services.

We now rank in the same group as major city centres like Zurich, Geneva and Frankfurt. For a small Island, in financial services we really are a global player.

Our Financial Services Industry contributes directly or indirectly to a significant portion of our tax revenue and there is no comparable industry that can contribute so significantly to our GDP on a per capita basis.

Diversification

Jersey is not a single sector economy and the States is committed to encouraging economic diversity. All sectors of the economy matter: - Retail, Construction, IT, Tourism and Agriculture.

The Economic Development Minister’s new Economic Growth Strategy, which is out for consultation, emphasises both the development of financial services products and markets and supporting existing sectors and diversification.

In difficult market conditions, it is impressive that agriculture has developed a new sense of confidence. I was greatly encouraged to learn of the successful Rural Conference yesterday. This has been an example of a Ministry and Scrutiny, under the Deputy of Grouville, working well together.

I am optimistic that with appropriate Government support, agriculture will continue to make a valuable contribution to the economic, social and environmental aspects of Jersey life.

Utility companies

During my time at Treasury, I thought it was important to concentrate on the balance sheet and particularly strengthen the relationship with our utility companies, for which I am responsible as shareholder. Each company has taken enormous strides so as to improve efficiency and the working relationships are excellent.

I would like to recognise the Boards of Jersey Water, Jersey Electricity, Jersey Post and JT for their efficient performance sometimes in difficult trading conditions.

Yesterday, Members heard of the exciting plans to invest in a ultra-high speed, fibre optic, broadband network. If we remain reliant on a copper wire network then the Island’s information and communication technology requirements could be compromised and undermine economic growth and competitiveness.

I have carefully analysed the case for going further than just speeding up the copper networks and have concluded that, without doubt, fibre optic networks are the future.

Perhaps even more exciting are the potential economic spin-offs in a whole host of areas that could mean Jersey is one of the first truly Gigabit economies. Lighting up Islanders' lives with fibre optic could create a cluster of world class ICT businesses that will come to Jersey because of the legal framework, tax benefits, expertise and life style.

It is a chance to create hundreds of new jobs that will directly support people and businesses in Jersey. Ultra fast broadband could revolutionise the way public services are provided, from healthcare to education, and energise future phases of the Comprehensive Spending Review.

Connecting every home is also socially inclusive. Every household in the Island, including low income families, will be able to connect at affordable prices. This investment in infrastructure is just the beginning of Jersey’s ICT strategy, but to do this, we must move quickly.

I would like to see funding for an independent ICT representative body, which will provide consultation, industry representation and promotion, similar to the way Jersey Finance acts for the finance industry.

Investing in tourism

While investment in ICT and continued investment in the finance industry will provide stability and diversification, there is a need to provide further support to Tourism. I have released additional money for the Tourism Development Fund from Contingency, and I believe we need to do more.

Event led and cultural tourism has been the success story of recent years - events like Jersey Live and Branchage Film Festival demonstrate the scope of what can be achieved.

At the moment other jurisdictions do not have the benefit of Jersey’s financial position and they are being forced to reduce their spending on culture and the creative arts. This creates an opportunity for the Cultural Industry to become a new sector for Jersey, acting as a further attraction to visitors.

Over the years Tourism has been a vital part of our economy. Today, it provides jobs and a range of benefits to the Island, including some of the finest hotels and restaurants, vitality in our shops and the sustaining of our air and sea links.

We should send out a clear message that we believe in Tourism's future and will do everything possible to provide support.

Income tax forecasts

States Members will appreciate that this has been an exceptional year with only a matter of weeks between this budget and the 2012 Business Plan. A review of all our forecasts of States Income suggests that no material changes are necessary.

I would like to recognise Members for supporting the difficult decisions that we have had to make. If we had not stuck with our three part plan, the new States Assembly would be facing falling business activity and the need for new taxes and cuts in public sector spending at a time when the economy will need a stimulus not a brake.

Capital spending

As we have seen, capital and infrastructure spending is a powerful way to continue to boost the local economy. We are currently making sure that the £37.5 million pounds of new capital in 2012 is actually spent in 2012.

Next year's spend includes:

£3 million for Gorey Pier Head
£2 million for Elizabeth Harbour remediation
£5.6 million for Philip’s Street Shaft
£11 million on sewers, roads and sea defences
£5 million for Pomme D’Or Farm
£2.6 million for Clinique Pinel
£8 million at the General Hospital

Money sitting in the States’ bank account does not benefit the economy and there are a number of capital allocations from previous years currently unspent. For that reason I am determined that both the £21 million for the new Police Headquarters and £9 pounds for the new Ann Court Car Park are injected into the economy as soon as possible.

More than that, there is now a pipeline of additional work that could be commenced by the Housing Minister, Property Holdings and SOJDC who are now working constructively together.

With the revised Investment Strategy that I published last week, we have created a new sustainable method for funding future investment in infrastructure. Our plans for capital spending represent a further significant stimulus for the Jersey economy: -

making the money we have work
keeping the economy moving
keeping people in jobs
delivering the dream of homes
improving our infrastructure
getting value for money
investing in the future

All of this has been funded from within our existing resources. I hope that all Members, particularly the Deputy of St John, agree this is a plan that has worked and is going to work even better.

Taxing non-financial service companies

I understand Members’ continued concerns on the issue of non-finance, non-locally owned businesses. As I have said, we are confident that the December meeting of ECOFIN will confirm that, following the repeal of the Deemed Distribution provisions, our zero/ten regime is not harmful.

Nevertheless, we need to be careful not to raise any doubts in the minds of the Code Group members by proposing changes to our business tax regime.

In the New Year, after confirmation from ECOFIN, we will engage with businesses to review options which meet the principles set out in the Business Tax Review. Whatever option we choose, Members will be aware that we cannot discriminate between locally owned and foreign owned companies.

I understand Members’ concerns and I am as committed to finding a fair solution. It is worth noting that measures were taken to bring other companies into the scope of tax.

Oil and extraction companies will pay tax at 20% in future and property development companies - whether locally owned or foreign owned - pay tax at 20% on their profits. More is also being done to ensure that our tax system is not abused through inappropriate tax planning.

Last year’s budget was extremely challenging. We needed to secure the Island’s economic stability to ensure we could balance our books. I am delighted to say that today, while we must still be responsible, we will not need to raise more taxes.

In fact, we can give something back to those who need it. This Budget is designed to start the process of unifying the Island and provide further economic stimulus.

2012 budget measures

I committed last year to increase the revenues raised from International Service Entities. I propose in this budget to increase the fees paid by banks from £30,000 pounds to £50,000 pounds. This should raise around £600,000 pounds.

I have considered ways of raising revenues from very high earners. Relief for pension contributions will be restricted for those earning over £150,000 pounds per year. This should raise around £1.2 million pounds and will mean that 20 Means 20 really does apply to the highest earners.

Since lodging the Budget I have received representations from industry who were concerned that these measures could lead to Islanders not planning for the future. I have listened carefully and studied the data, and I do not believe the measures will have this effect.

I propose restricting the tax free element of termination payments to £50,000 pounds except in the case of death, injury and disability where the payments will remain fully exempt. This measure should raise in the region of £500,000 pounds.

Impôts

Over the last 3 years we have managed broadly to maintain the level of impôts duties, despite the falling trend in importation and consumption of alcohol and tobacco. In previous years we have raised fuel duty.

Sensitive to incomes being squeezed, I am pleased to propose that there will be no increase in fuel duty in 2012.

However, I do propose increasing duty by 5% on alcohol and 10% on cigarettes. This means:

35 pence on packet of 20 cigarettes
50 pence on a litre of whiskey
6 pence on a bottle of wine
1 penny on a pint of beer but 2 pence on a pint of strong beer

These increases are in line with the policies of my colleagues, the Health and Home Affairs Ministers and are supported by the Council of Ministers.

The States approved a new Vehicles Emissions Duty in the 2010 Budget. Earlier this year, there was consultation on changes to emissions duty and it has been accepted that further changes to VED would not assist new car sales. For this reason, I am proposing an increase of just 5% for all categories.

This will only mean an extra £2 pounds on the cost of a Ford Focus. These modest increases in impôts and VED should raise around £2 million pounds.

Court fees

As part of the CSR process, I committed to a review of Court service charges and the Budget proposed a range of changes to Court Fees in order to cover the costs of providing these services to users. Following representations from the Citizens Advice Bureau and other concerned bodies, I do not propose to increase the charge for small debts pursued through the Petty Debts Court.

Whilst the measure was not material, I do not want to create a difficulty in the collection of small claims.

Families

Conscious that families are feeling the pinch, this Budget provides substantial additional support to those families with young children.

During the consultation on the FSR, I identified that working parents were paying up to £16,000 pounds a year for child care, whereas the tax relief was only on the first £6,150 pounds. This Budget proposes to almost double the childcare relief from £6,150 pounds per year to £12,000 pounds per year for pre-school children.

This measure alone benefits families by up to £1,580 pounds a year for every pre-school child that is in childcare. As an added bonus, I propose that it will apply immediately to 2011 assessments.

This helps middle income families the most. I believe this is the single biggest targeted improvement in taxation for families with young children that has ever been proposed. The Council of Ministers needed no persuading on this.

Families will benefit by around £1 million pounds compared with last year. This is a substantial benefit which not only helps families to meet the cost of child care but goes some way to helping the Island attract and retain essential workers such as nurses.

In addition, after consultation with the Education Minister, I am pleased to propose the extension of tax relief for child care to States’ run nurseries as well as private nurseries.

Exemption thresholds

In the last few years we have done a great deal for those on Income Support. Now pensioner households can look forward to a secure future with the new long term care scheme next year.

I am however conscious of the effects of the recession on middle income households. I therefore propose increasing exemption thresholds not in line with average earnings at 2.5%, but by the full rate of inflation at 4.5%. This is a £7 million benefit designed to help middle-income households.

I will give Members an example. If we take a married couple where both parents work and have a household income of £55,000, with 2 children, one of which is under the age of 3. They pay £12,000 in nursery fees and have a £275,000 mortgage.

Their income tax liability will be £1,830 lower than this year.

Home ownership

Since lodging the budget I considered whether there were any additional measures that could be made. Many members believe that home ownership is important and I agree.

Currently first-time buyers only benefit from full relief on properties on the first £300,000 and there is no relief beyond £400,000 pounds.

This doesn't make sense when an average first time buyer house and HomeBuy house are valued above this level.

For that reason I've lodged an additional measure that extends first time buyer Stamp duty relief for properties up to £450,000 pounds. First-time and Homebuy buyers will benefit from this relief.

First time buyers on low incomes also need help in financing their deposits. I will be recommending to the new Council of Ministers that consideration is given to creating a scheme to support first time buyers on low incomes with loans at low interest rates.

The Dwelling House Loan Fund and the Housing Development Fund have substantial unallocated balances that could be used to fund such a scheme.

Allocating £2.5 million pounds could help more than 50 low income households achieve the dream of home ownership and provide a much needed boost to the residential housing market.

Over the past year there has been much debate about the best ways in which to target tax relief. Many proposals, including GST food exemptions, have been suggested. I understand that the intention behind those proposals was to help families.

The problem is the complexity and administrative cost that makes them inefficient.

The Budget measures I am proposing today are affordable, targeted, will leave more money in hard-working families’ pockets, maintain efficiency and create no extra administrative cost.

As I said at the beginning of this statement, this is a Budget of consolidation, with no unpleasant prescriptions, giving to those who need it and preparing for and investing in our future.

Tax policy development

Some important advances in tax policy have been described - with zero/ten and 1(1)(k)s - but we plan to do more. It is important that Jersey’s tax system continues to support all those who live and do business here. Our key priorities remain:-

Ensuring Jersey stays internationally competitive and delivering a tax regime that works for Jersey’s individuals and businesses.

However, specific areas of focus over the lifetime of the next Assembly should include: -

considering whether a move to independent taxation and current year assessment for all individuals is feasible and how it might be achieved
replacing the 27% marginal rate of personal income tax with a simpler regime, which retains the low effective tax rates that all Jersey taxpayers enjoy
reviewing opportunities to go further with 20 means 20 for those on the highest incomes, particularly those on more than £150,000
more work on property development returns
reviewing rules on relief for interest payments to make them easier to comply with

Taxes Transformation Programme

As well as having a clearly understood tax policy that sustains the Island’s economic competitiveness, we need to collect the taxes due as efficiently and fairly as we can. We will make it easier for taxpayers to file and pay their returns electronically.

The Taxes Office will make more use of its investigative and penalty powers so as to ensure that everyone pays the tax that is rightly due.

Last year I asked the States to put more money into tax collection. This has proved to be a wise investment as the additional tax collectors have more than paid for themselves. I can confirm that our additional tax collectors have recovered a further £2 million pounds.

Our Transformation Project could achieve annual increases in tax revenues of up to £10 million pounds. Simplifications of the Personal Tax system and self-assessment for Business and Personal Taxes will be achievable and will also save administrative costs.

Greater use will be made of data sharing between Income Tax and Social Security.

International relations

Jersey has a robust and respected regulatory framework for financial services. Members will recall the importance I have attached to Tax Information Exchange agreements and double tax agreements in past Budgets.

Treasury officials have effective working relationships with a growing number of jurisdictions and as a result we now have 25 Tax Information Exchange Agreements in place. This is another area where we lead in the world.

I am pleased to report that since lodging the Budget, and after months of hard work, I signed a TIEA with the Indian High Commissioner in London last Thursday. The signing of this agreement will open up this significant new market for the Island.

We will continue to pursue reciprocal agreements with other responsible jurisdictions.

Senator Terry Le Sueur

This is the last sitting where my predecessor and our Chief Minister will be in the Assembly. I would like to recognise his extraordinary diligence, far sightedness and patient endeavour. His long standing commitment to financial prudence and stability has served the Island extremely well in the past.

He has played a significant part in creating the legacy that I described earlier. It has been a privilege for those of us who have worked with him. I for one will miss his wise, calm and always thoughtful guidance.

I would also like to thank the Council of Ministers, my Assistant Ministers, the Treasurer and all the hard-working Treasury staff. This has not been an easy time. Despite being an enormously difficult three years, a tremendous amount has been achieved.

a new, respected Treasurer of the States and an almost completely reorganised Treasury
a new financial planning framework and CSR which will change forever the way we manage spending
a more active management of the balance sheet
certainty over tax and reform of tax policy

And finally

This budget marks the end of a tough three-year plan and while today we are considering 2012, it will be for the new Assembly to continue to safeguard our future. While we have dealt with the serious matter of the deficit there is always more to do..

The new Council will need to: -

Set a new annual savings target for the CSR
Restore the Stabilisation Fund
Identify future funding for Health and Social Care
Plan for the falling pupil numbers in secondary schools
Find ways of financing the long-term infrastructure investment needs of the Island, including Housing

Last year we committed to the difficult decisions needed to close the fiscal gap and return to balanced budgets by 2013. This year we are able to benefit from those measures and give money back to Islanders and their families.

With this Budget I am continuing to get money into the economy with significant capital expenditure: -

getting people back to work
creating jobs and training for unemployed young people
increasing tax relief for families with young children
raising exemption limits to the benefit of most taxpayers
boosting home ownership
leaving more money in the pockets of Islanders

While other jurisdictions may have been financially reckless, leading to the financial crisis in the world today, over the last three years Jersey put in place measures to preserve our hard earned financial security and taken difficult decisions in the interest of securing sustainability for future generations.

Sir, I am an optimist: winters always turn to spring, economies run in cycles and a worldwide recovery will surely emerge.

The measures we have taken position Jersey extraordinarily well to capitalise on that recovery. From a sound and well managed base, secured though the foresightedness of this Assembly, the next Assembly can go on to deliver prosperity for the Island we serve.

Sir I commend this budget to the Assembly.