JERSEY’S public finances are ready to ‘weather the storm’ of global economic uncertainty, the Treasury Minister has said as he announced proposals to freeze alcohol duty, increase stamp duty rates on second properties and invest £61 million in government services.
Speaking as ministers unveiled their Common Strategic Policy – which sets out their core aims for this term of office – and the Government Plan 2023-26, the financial blueprint for the next four years, Deputy Ian Gorst said that the Island continued to have a ‘strong economy’.
Core priorities outlined in both documents are the need to help Islanders navigate the housing and cost-of-living crises.
The CSP and Government Plan represent two major milestones in the new government’s plans for this term of office, following the Assembly’s approval of the £56.5 million emergency mini-budget last month.
Deputy Gorst said that the Government Plan would, if approved in December, aim to invest an additional £61 million in the Island’s key public services during 2023.
He said the financial ‘volatility’ being experienced in the global markets, including the uncertainty caused by the ongoing war in Ukraine and worsening energy crisis, had presented significant difficulties but added that Jersey’s economy had recovered well from the pandemic and could ‘weather the storm’.
‘The important thing for us is that we have got a strong economy, we have got high levels of employment and low levels of unemployment so the economy is working well. It has largely recovered from Covid and the effects upon it so we do have a strong foundation and we can weather the storm. However, we have to recognise that things can change very quickly when you have this global volatility,’ he added.
Commenting on whether additional measures – similar to the social security cuts and increased tax thresholds included in the government’s mini-budget – would be introduced before the start of 2023, he said: ‘That will depend on what happens to both inflation and interest rates. I think the biggest risk to Islanders will potentially be around interest rates [which will affect] those with mortgages, so we are keeping that under review as we see interest rates increase.’
The proposed Government Plan will be debated in December, although Deputy Gorst said it was possible that amendments could be brought forward before then.
‘We really don’t know what markets are going to do and what other economies are going to do, and therefore what knock-on effects that will have on us. We know that, as we sit here, we are in a strong position because we have a strong economy. I am confident [that Jersey will weather the storm] but it was really important that we brought forward this affordable, sustainable budget so that we do have latitude for downside risks,’ he added.
In addition to the Government Plan, the Council of Ministers has agreed seven priority areas to focus on over the next four years as part of its proposed Common Strategic Policy.
Among the headline priorities outlined in the CSP are the need to ‘develop a more sustainable, innovative, outward-facing and prosperous economy’, to ‘protect and enhance our environment’ and to ‘improve access to, and supply of, good-quality affordable housing, and help people to achieve a decent standard of living’.
Individual ministerial plans, providing further details on how these objectives will be met, are also due to be unveiled before the end of the year.
