MINISTERS will be required to develop a plan to double the value of the Island’s “rainy day fund”, should a backbencher’s proposition be supported by the States Assembly.
Having cited the need to build reserve funds as a priority during his successful election campaign, Deputy Max Andrews has lodged a proposition that is set to be debated next month.
Deputy Andrews is calling for Treasury Minister Alan Maclean to develop a long-term funding plan to increase the value of the Strategic Reserve to between 30% and 60% of Jersey’s Gross Value Added, with the plan to be implemented by the start of 2029.
In the report accompanying his proposition, the St Helier North representative highlights analysis by the Island’s Fiscal Policy Panel which shows that the Strategic Reserve, often referred to as the rainy day fund, was currently below 20% of GVA and was likely to drop to 18% as a result of transferring £277 million to the new hospital project.
The panel’s recommendation, he added, was that the “desirable range” for the fund over the next 40 years was between 30% and 60%.
The report adds that: “Despite [the FPP] also recommending the States Assembly ‘should give an indication of the desired size of the Strategic Reserve’. no indication of a desired size or long-term plan have been put forward – for these reasons I remain concerned about the lack of a dedicated strategy to build the Reserve over time.
“We need to overcome the challenges we face and to do so we need a coherent plan. I believe the Treasury Minister is best placed to bring forward a long-term funding plan – this will ensure future States Assemblies work towards building the Reserve relative to the size of Jersey’s economy to improve the Island’s resilience.”
Recognising that concerns were likely to be expressed about whether the funding plan would be deliverable given increased government expenditure, Deputy Andrews stresses that spending cuts must be achieved, and accompanied by a growth in revenues.
The proposition is currently scheduled to be debated in the Assembly during the sitting that starts on Tuesday 20 October.
