Minister's 'good news' Budget - Jersey Evening Post

He says that ‘it is a Budget that gives something back to the hardworking people of Jersey, who have carried on through difficult economic times’. The question that will be on people’s lips is, of course, this – how accurate is that assessment of the Budget proposals?

The truth of the matter is that many taxpayers will have more money in their pockets if the proposals are ratified by the States. However, because of the technicalities of the measures being recommended, Senator Ozouf might see what he envisages making less of a splash than is deserved.

Although what are described as the ‘main cornerstones’ of the present tax regime will remain in place, States Members will be asked to approve a reduction in the marginal rate of income tax by one per cent to 26 per cent, increases in exemption thresholds, and tax breaks for parents of children in higher education.

It is the marginal rate concession which is likely to lead to most confusion, though it is fair to say that anyone eager to understand the mysteries of marginal taxation will find more than adequate explanations on the government website, www.gov.je.

It is also evident from the Budget statement itself that the rate reduction will have a positive impact on the finances of a great many taxpayers. Surprisingly, 84 per cent of Islanders who pay income tax now do so at the marginal rate.

But if there is rejoicing in the ranks of ‘middle Jersey’, there may be some wailing and gnashing of teeth among smokers and drinkers. For reasons which Senator Ozouf insists have to do with health rather than raising revenue, major increases in the duty payable on alcohol and cigarettes are recommended.

As always, the pound-in-the-pocket issue will be dominant in most people’s reactions to what is in the Budget document, but there are other items of major significance. For example, capital spending proposals are dealt with in detail, as a plans to fund three major projects, the new hospital, social housing and liquid waste systems. One, housing, will entail borrowing, but the other two will be paid for by the judicious use of money already in, or expected to accrue, in public reserves.