Jersey's Treasury Minister, Phillip Ozouf has welcomed the recent Fiscal Policy
Panel (FPP) report, which shows that while growth in Jersey is to be weaker
than expected, the government has been successful in implementing a long-term
plan that will bring the territory's finances onto a sustainable footing.
The report says that Jersey should plan on the basis of a global recovery that
will be more fragile and protracted than was expected three months earlier. The report warns Jersey policymakers to be cognizant of these downside risks particularly as Jersey's current fiscal strategy
provides the 'absolute minimum' in terms of fiscal consolidation. The report advises that if
any significant economic slippage in Jersey occurs, or any measures to dilute fiscal retrenchment are implemented, compensating
measures must be implemented promptly.
The report advocates that the government avoid decisions that would
reduce the tax take or increase government expenditure in the forthcoming 2012
budget. While the government has made significant progress on reducing the deficit - implementing a number of tough reforms including an increase to the goods and services tax rate - Jersey
is expected to run a deficit of around GBP100m (USD160m) this year, before this is reduced
to GBP22m in 2012.
Welcoming the update, Ozouf said:
I am very pleased to see the Fiscal Policy Panel confirm that
our public finances are on the right course, and that the States should continue
with its Comprehensive Spending Review and Fiscal Strategy Review measures,
as an absolute minimum.
It is timely that our independent economic experts are reminding us
that the global economic climate has deteriorated and that, as a result, the
financial situation is still very tight.
"Although the FPP does not recommend further discretionary stimulus, they
have advised that we should support the economy without weakening state finances.
The FPP's main conclusions endorse the difficult decisions the States
Assembly has been called upon to make in the last few years; decisions which
mean we can act quickly and decisively, having already balanced the books and
dealt with the deficit.
LAWANDTAX-NEWS.COM
