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2018 Budget: fair, innovative and confident

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Monday 09 October 2017

The 2018 Budget balances the need to invest for our community's future with the discipline needed to maintain financial stability.

It is a Budget that, when viewed alongside the 23 policy priorities for government that the Policy & Resources Committee has also put forward today, confirms the States of Guernsey's commitment to support and foster economic growth, while remaining a beacon of stability amid much global uncertainty.

Deputy Gavin St Pier, President of the Policy & Resources Committee, said the Budget was fair, innovative and confident.

Measures proposed include:

Deputy St Pier said:

'There are no surprises in this Budget, other than pleasant ones. I am particularly pleased that we are able to recommend the first transfer into our reserves in 10 years, having needed to draw down on them for several years. We are reaping this success as a result of discipline over an extended period and it shows the real advantages of planning.

'Another positive measure we are recommending is the increase in personal income tax allowances by £500, or 5%, to £10,500 for a single person, which means a tax cut for the average taxpayer of £100 a year or £200 for a couple.

'The first two phases of the withdrawal of personal allowances for higher earners (from the 2017 and 2018 Budgets) are expected to raise £3.8million per annum on an ongoing basis. This has been fairly redistributed by real terms' increases in personal income tax allowances over that same period, which will be of greatest benefit to those on lower and middle incomes.

'Additionally, we want to stimulate the open market. The innovative proposal for new residents buying a family home in the open market will  serve that aim but also further increase the attractiveness of Guernsey to high net worth individuals looking to relocate.'

The Medium Term Financial Plan, agreed by the States earlier this year, provided that the burden of returning to fiscal surplus would be fairly shared between a reduction in government's cost base through the reform of public services (65%) and taxpayers - particularly those most able to pay - through targeted increases in revenue (35%).

The Plan envisaged that, for 2018, £3.5million would be generated by revenue raising measures (in addition to normal annual changes) and government expenditure would be reduced by £5.5million. The Budget details how both of these objectives will be met.

In addition to the Budget, the Policy & Resources Committee has today put forward the 23 policy priorities for government, having concluded work with the Principal Committees to set out a prioritised business plan for the States of Guernsey - the Policy & Resource Plan.

Deputy Gavin St Pier, the President of the Policy & Resources Committee, said:

'These 23 priorities are drawn from the Policy Plans produced by the Principal Committees. Each priority will, to different extents, require cross-Committee working. This is, therefore, a truly government-wide plan, built by the Principal Committees and co-ordinated by the Policy & Resources Committee.

'The foundations of the plan are to support work to strengthen our economy and manage our public finances with prudence. Continuing to achieve both, means that we can invest in public services. That's why the Medium Term Financial Plan is such an important part of the Policy & Resource Plan - it will provide the balance between investment and prudence which will ensure that we can with confidence meet the needs of community and business in Guernsey.'

The Policy & Resources Committee was concerned that some committee policy plans were over-ambitious and that, as a result, the identified priorities could not all be resourced. The States agreed in June last year and directed the Policy & Resources Committee to 'work with Principal Committees to refine their policy plans to the extent needed to enable the prioritisation of resources to take place and report back to the States of Deliberation as part of the 2017 Budget Report'.

This resulted in the prioritisation of 23 policies drawn from the Committees' policy plans. Committees are required to report to the States annually, beginning in June 2018, on progress against their policy plans and the Policy & Resources Committee will place particular emphasis on the need to hold to account progress against the 23 policy priorities.

This reporting process will also make it clear if Committees are pursuing other policies at the expense of those prioritised by the States and thereby not contributing sufficiently to the agenda for government agreed by the whole Assembly.

Deputy Lyndon Trott, Vice-President of the Policy & Resources Committee, said:

'Having returned last week from the Conservative Party Conference in Manchester, it is clear that Guernsey - like the UK and other major economies - faces significant global challenges, not least Brexit. That means we need to build a robust plan that maintains confidence, competitiveness, low taxation and high quality public services.

'This plan will do that, as long as the States sticks to it. We need to maintain discipline and focus on our shared priorities as a government. If we do so, we will deliver the outcomes that the States agreed last year.  The Budget provides some innovative solutions working with the third sector to help the community deliver the Future Guernsey vision.  These include the development of a social investment commission and support for a new Bailiwick Health and Wellbeing Trust. '

The 2018 Budget aims to secure the necessary funding to support the delivery of the Policy & Resource Plan. This includes:


P&R Plan Update October 2017 Budget on a page 2018 2018 Budget Report 2018 Propositions

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