09 November 2011
The 2012 Budget, approved by the States Assembly, introduces a number of measures which support the economy and provide relief to Jersey households.
The draft Budget proposed no major tax increases, an increase in personal income tax exemptions in line with inflation and a doubling of childcare tax relief for pre-school children. To provide further support for households, yesterday’s Budget also increased tax relief for first-time home-buyers through the extension of the stamp duty limit to £450,000.
The Budget sets out an extensive capital growth programme to stimulate the economy, with a significant focus on the development of infrastructure and an information and communication technology (ICT) sector.
The Treasury and Resources Minister, Senator Philip Ozouf, commented "Our plans for capital spending will continue to act as a stimulus for the Jersey economy. We are making sure our money is working, keeping the economy moving, keeping people in jobs, delivering the dream of home ownership to more Islanders, improving our infrastructure, getting value for money and investing in the future.
“We can manage this without borrowing, when the rest of the world in still facing serious financial turmoil. Jersey is in a strong position. It is essential, though, that we reduce the financial pressures on Island households. This budget is intended to put money back in people’s pockets and to ensure that we continue to generate revenue and create jobs.”
Senator Ozouf will be recommending that the new Council of Ministers consider setting up a scheme to support first time buyers on low incomes with loans at low interest rates, using unallocated balances in the Dwelling House Loan Fund and the Housing Development Fund.
He added “This budget recognises that people on low and middle incomes are facing higher costs and it aims to ease the burden on ordinary households in Jersey.
“Now that we have taken the difficult decisions to tackle the impact of the global downturn, we can maintain our prudent approach to managing the island’s budget, while also delivering additional support to those who need it most.
“I am an optimist. Winters always turn to spring, economies run in cycles and a worldwide recovery will surely emerge. The measures we have taken position Jersey extraordinarily well to capitalise on that recovery.”
£37.5 million pounds of capital funds will be spent in 2012 to boost Jersey’s economy. Projects include:
- £3 million pounds for Gorey Pier Head
- £2 million pounds for Elizabeth Harbour remediation.
- £5.6 million pounds for Philip’s Street Shaft
- £11 million pounds on sewers, roads and sea defences
- £5 million pounds for Pomme D’Or Farm
- £2.6 million pounds for Clinique Pinel
- £8 million pounds at the General Hospital
Other Budget provisions
- childcare relief to include States nurseries
- tax exemption thresholds increase in line with inflation (4.5%) to ensure people on low incomes remain outside the tax net. This is a positive benefit for most households and leaves an extra £7 million in people’s pockets
- tax allowances maintained for those within 20 means 20
- tax relief to increase for childcare costs for the under-3s, from £6,150 to £12,000 per year
- income tax relief on pension contributions restricted for those earning more than £150,000. This measure is another step towards 20 means 20 for higher earners
- ISE fees paid by banks to increase from £30,000 to £50,000 per year - to match GST increase and to meet the commitment given in the 2011 Budget
- no increase on fuel duty
- tobacco duty up by 10% (35p on a packet of 20 cigarettes) and alcohol duty by 5% (50p on a bottle of spirits, 6p on a bottle of wine and 1p per pint of beer or cider).
- Vehicle Emissions Duty rates up by 5%.
- a cap of £50,000 on tax free termination payments, reducing the tax free amount of payments received on termination of employment, affecting primarily high earners
- the ceiling for relief on stamp duty extended for first time buyers from £400,000 to £450,000. This represents relief of up to £6,500 for eligible individuals