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Budget for 2019 approved

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GOVERNMENT spending plans for 2019 – which include price hikes on fuel, alcohol and cigarettes – have been approved following a lengthy States debate.

Treasury Minister Susie Pinel

The 2019 Budget proposals include proposals to overhaul the stamp duty rate, increased personal tax allowances and lays out £36 million in capital spending projects.

Treasury Minister Susie Pinel said that she was following her ‘ABC model’ – that it is affordable, balanced and common sense is applied to all measures.

She added that this was a ‘steady as you go’ Budget and warned that future spending plans would be more difficult with tax increases or new user pays charges likely to be needed.

One of the biggest moves affects stamp duty as charges on mortgages under £600,000 will be abolished completely – and tapered for homes valued between £600,000 and £700,000 – while properties up to £500,000 will qualify for first-time buyer’s relief. To offset this, all standard stamp duty rates will be increased by 0.5 per cent on homes over £500,000.

And impôt duties will also be increased, despite attempts from Deputy Scott Wickenden to block price rises on alcohol.

The Impôt rises are:

Unleaded petrol/diesel: 2p per litre.

Pint of normal strength beer/cider: 3.5 per cent increase.

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Bottle of table wine: 3.5 per cent increase – 5.3p per bottle.

Litre of spirits: 3.5 per cent increase – around 50.4p per litre.

Packet of 20 king-size cigarettes: 7.5 per cent increase – 59p per pack.

50 grams of hand-rolling tobacco: 11.5 per cent increase.

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Members also rejected amendments from St Helier Constable Simon Crowcroft to halve the controversial retail tax to a top rate of ten per cent and Senator Sam Mézec to overhaul the personal tax system.

Senator Mézec had brought forward proposals which would have removed ‘20 means 20’ and brought everyone one a single rate of tax.

The proposals would have introduced a new flat rate of tax of 25 per cent for everybody with everyone eligible for tax breaks. This, he said, would give 43,000 Islanders a tax cut, with the richest 3,500 people in Jersey seeing a hike.

However, his proposals to amend the Budget were rejected yesterday by 34 votes to 12.

Deputy Pinel said that a review of the Island’s tax system was being undertaken, the recommendations of which were likely to form part of the Government Plan in 2019.

Deputy Pinel said the Assembly would have to make ‘tough decisions’ on the Island’s tax system with the government facing a potential deficit of £30 to £40 million next year.

She said: ‘Indications are that we will be running a deficit in the region of £30 to £40 million in the future. Members should be in no doubt that I will not allow this to pass.

‘We can’t have it all. We will have to prioritise – we will have to make choices.’

‘Jersey has a strong financial basis, a strong economy and we have record levels of employment. We are well placed to meet the challenges of the future and I look forward to working with the Council of Ministers and this Assembly to deliver our future.’

The Budget was approved by 43 votes to two with Deputies Geoff Southern and Montfort Tadier voting against it.

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