16 June 2009
The Minister for Treasury and Resources; Senator Philip Ozouf, has published the States of Jersey’s
2008 Accounts.
The key points of the 2008 Accounts are:
• States Net General Revenue up by £101 million to £660 million (an increase of 18% on 2007)
• Net Revenue Expenditure of Non-Trading Departments up by £42 million to £522 million (an increase of 8.8% on 2007)
• £143 million of capital projects, including £103 million for the Energy from Waste Plant, funded from 2008 revenues
• A surplus of £98 million before funding the Energy from Waste Plant from 2008 revenues
• Net assets of nearly £1.5 billion, including £582 million held in the Strategic Reserve and Stabilisation Fund
The Minister for Treasury and Resources, Senator Ozouf commented: “This is an excellent financial result. These accounts show the States finances are in good health with significant funds held in our reserves. 2008 was a year of impressive growth in our income and controls on spending meant that we were still able to afford major investment in new capital projects”.
The States planned financial surplus for the year was £58 million. This planned surplus reflected the phased introduction of GST, ITIS and ’20 means 20’ in advance of the loss of tax revenues in 2010 from the introduction of the 0/10% corporate tax system. The successful introduction of GST in May 2008 generated £32 million in tax receipts for the year; this is largely in line with the forecast of £30 million.
The actual surplus was £98 million. This enabled £103 million of funding to be allocated to fund the Energy from Waste Plant in 2008, bringing the total funds allocated to capital projects in 2008 to £143 million.
Senator Ozouf commented: “It is an extraordinary achievement to fund such levels of capital spend from our annual revenues. This generation will pass on significant capital assets, such as the Energy from Waste Plant, to the next generation without any related debt burden. It is a situation that is the envy of most other developed countries, which now have significant debt, and it is a testament to the success of Jersey’s prudent financial policies.’
The level of surplus achieved compared to that planned is largely explained by increased income tax receipts. 2008 tax receipts arose from company trading profits in 2006 and the incomes of salary and wage earners in 2007, when the economy was buoyant. In these years, growth in employment and pay, the introduction of proportional tax allowances, and the impact of ITIS collection all contributed to the increase in income tax receipts.
The overall increase in States net revenue expenditure in 2008 was 8.8% or £42 million. This increase included £6.1 million on the Historic Child Abuse Enquiry and £9.3 million on the short term additional costs of income support transitional relief. The remaining underlying increase in States spending was 5.5% or £27 million, reflecting prioritised increases in expenditure on our core public services as well as more modest increases in expenditure on other services. In particular, underlying expenditure increased by £10 million on health and social services, £7.8 million on social security, £3.7 million on home affairs and £1.5 million on education, sport and culture.
The Treasury’s project to modernise States accounting practices and implement GAAP accounting is well underway. This set of accounts reflects further progress towards this aim, with an improved format and disclosure of additional financial information. Ian Black, Treasurer of the States, commented: “These accounts represent the latest development in a continuous programme of improvement. 2009 will see a set of GAAP based accounts prepared for the first time; something few, if any, other small jurisdictions have achieved”.
In conclusion, Senator Ozouf commented: ‘We have put ourselves on a sound footing to face the challenges immediately ahead of us. We have implemented the States approved fiscal strategy, including the introduction of GST, in advance of the loss of tax revenues from zero ten company tax which will affect us from 2010. We have also run surpluses in the good times to insulate us from any loss of tax revenues, and increased spend on social security benefits, arising from the recession.”
gov.je