GOVERNMENT is on course to rebalance its finances while working to develop the Island’s economy and protect the vulnerable.
That was the message from Treasury Minister Eddie Teare MHK when he presented the Budget to Tynwald today (Tuesday February 19, 2013).
Further savings of £17m in real terms will be delivered in 2013/14, taking total savings since 2010/11 to £79m. Health and Social Care are prioritised in overall net spending of £547.9m, which is up 1.6% but includes a scheduled £31m from reserves.
Mr Teare said his second Budget was about fairness and setting firm foundations for the future.
The Minister told Tynwald: ‘This year’s Budget is titled Firm Foundations. You need these if you are to build anything that will stand the test of time. We have looked across the whole of Government and prioritised spending for the next three years. We now know how we will rebalance the Budget by 2015-16. The next two years will be about building that lasting achievement of a re-balanced budget. Our house will be in good order.’
Key features of the 2013/14 Budget include:
- Three year targets published for all Departments, showing where and how the budget will be balanced by 2015/16.
- National Insurance ‘holiday’ scheme for private sector employers engaging additional staff to continue until April 2015, having led to the creation of 340 new jobs in its first year.
- An extension of the 10% corporate income tax rate (currently covering banking and local development and rental income) to include major retailers with annual profits of at least £500,000.
- Repayment of the Manx Electricity Authority’s outstanding additional debt of £35m (as part of capital programme).
- Use of reserves in current year expected to be £47m instead of £55m, thanks to better tax receipts.
- A planned reduction in Government headcount of 100 posts per year for the next three years, adding to the 400 posts and 300 staff lost since 2010.
- Target set for £10m annual efficiency savings through the Transforming Government programme.
- Capital spending programme of £97m with £44m for construction schemes including £19m for local authority housing.
- A new initiative to help the long-term unemployed, led by the Department of Economic Development (DED) in partnership with the Department of Social Care, aiming to halve numbers to under 100 over next two years.
- New DED financial support packages and marketing to target key business decision makers, to protect existing jobs and create new ones.
- Legislation to stop avoidance of Manx income tax through ‘personal service companies.’
- Nursing Care Contribution payment increased from £100 to £110 per week.
- Maximum income tax liability, the ‘tax cap’, remains at £120,000.
- Personal Allowance Credit remains at £500 per person.
- No change to income tax rates, personal allowances or thresholds:
- The income tax lower rate for individuals remains at 10%.
- The income tax higher rate for individuals remains at 20%.
- Income tax personal allowances unchanged at £9,300 for single persons and £18,600 for jointly assessed couples.
- Additional Personal Allowance for over 65’s remains at £2,020. The threshold at which the higher rate for individuals becomes payable remains at £10,500.
Further information can be obtained from:
Mark Shimmin, Chief Financial Officer, The Treasury, Isle of Man.
Telephone: (01624) 685586
Fax: (01624) 685662
e-mail: budget@treasury.gov.im
web: http://www.gov.im/budget
