GOVERNMENT finances have performed ‘better than anyone expected’ despite the impact of the pandemic, according to the Treasury Minister.
The government’s annual report and accounts for 2021 show that previous forecasts of an income deficit actually turned into a £59 million surplus.
Its investments also made hundreds of millions in a volatile year as markets bounced back. Government funds gained £348m, which was up from £253m in 2020. Meanwhile, the Strategic Reserve – also known as the rainy day fund – which is held in case of economic crises, also grew by 7% and totalled more than £1 billion at the end of the year.
Deputy Pinel said: ‘In presenting these accounts, during a second year that was dominated by Covid-19, it is pleasing that we ended 2021 in a better financial position than anyone expected.’
Asked whether the strong investment performance and increase in the rainy day fund could be used for targeted support for Islanders struggling with the cost of living, Deputy Pinel said: ‘A lot of the investment income from the Strategic Reserve will be used to pay for the borrowing we are about to do.’
The States Assembly approved £1.74bn of borrowing in December to help pay for the proposed new hospital at Overdale, repay Covid debt and cover pension liabilities, with ministers stressing the Island could ‘afford the cost of the debt, and that we will be able to repay the debt without placing additional burdens on future generations’.
States treasurer Richard Bell said that while 2021 and 2020 had been good years for the Strategic Reserve, there had ‘been experiences of not good years’.
He pointed to the recent announcement by Social Security Minister Judy Martin that an extra £20 a month would be provided to Islanders on low incomes as an example of the government tackling the cost of living, and that officials were working on further assistance.
Mr Bell also highlighted that stamp-duty revenue had increased by 64% to £61m last year, which had been ‘driven by high volumes of transactions, as well as the high rises in housing costs’.
When questioned whether this was good for the government coffers but bad for Islanders looking for affordable homes, Deputy Pinel responded: ‘Housing has gone up everywhere, not just in Jersey, but I do appreciate the rising costs have made it very difficult for people to get on the ladder at an earlier age.’
She said the government was providing ‘far more affordable housing in the Island’, which she said would allow more people to get on the housing ladder and own an affordable home.
Government assets increased by £481m to £8.1bn, while Revenue Jersey collected £750m in tax revenues (up by 11%).
The government accounts were also boosted by the sale of JT’s ‘Internet of Things’ business, delivering a one-off £40m windfall.
The pandemic response cost less than initially forecast at the start of the year and was a drop-off from the 2020 Covid-19 spending.
The government’s annual report highlighted how taxpayers’ money has been spent and what strategies have been launched throughout the year.
These included its four-year children and young people’s emotional wellbeing and mental-health strategy, to tackle poor mental health among young Islanders, and the continuation of Covid-support programmes such as the Co-Funded Payroll Scheme.
Fifteen care leavers were helped into employment throughout the year, while the vaccination programme delivered 210,000 vaccinations.
The government also published its Draft Carbon Neutral Roadmap, with proposals including banning the sale of new petrol and diesel vehicles by 2030.
