09 April 2009
The Treasury Minister is today (9 April 2009) proposing Jersey’s first fiscal stimulus, a comprehensive plan to help mitigate the effects of the global economic downturn.
In a proposition lodged today for debate on 19 May 2009, Senator Philip Ozouf will ask the States to allocate immediately £44 million (about 1% of GVA) from the Stabilisation Fund to finance a package of measures to support the Island through the downturn. The package is designed to boost employment, support businesses and protect low-income households.
Senator Ozouf said: “A number of weeks ago I asked the Fiscal Policy Panel to update their assessment of the economic outlook. Having received that advice and following further extensive research, I am advising the States to now act quickly and decisively to support employment in the Island, as the economy continues to weaken. The Stabilisation Fund was created for just these circumstances and I do not believe we should delay in using it.
"The types of actions that need to be taken and that merit effective use of the Stabilisation Fund have been identified. The favoured policy options and in order of preference are:
1. New programmes of maintenance/infrastructure spending
2. Supporting employment in the Island by assisting individuals affected by the economic downturn and joint third
3. Business support and New programmes to help individuals retrain/skills
"I believe there is now a strong case for investing some of the money that we put by for difficult times to help Islanders deal with the economic downturn. We have calculated how much we are likely to need to plug the gap in our tax revenues for the next two years, and I believe we should make significant investment in a drive to help safeguard jobs.
"Departments will be invited to bring forward proposals for projects that will help support the economy during these difficult times. We have laid down rigorous criteria that each project will need to meet, and I want to work closely with Scrutiny to determine which of the projects proposed by States departments meet those criteria.”
He concluded, “We need to act fast if these proposals are to have the maximum effect. I want to see some of these projects up and running by the middle of June. The sooner we can inject cash into the local economy, the bigger difference it will make to Islanders - not in a year’s time but now, when it matters.
“Jersey is not unique in proposing such a package; other countries are offering similar initiatives. However, we differ in that, due to the strength of our public finances, we are not borrowing money in order to do this.”
A number of possible investments by departments have been identified: for instance, Housing has a backlog of maintenance and refurbishment work that could be brought forward, providing work for local tradesmen and contractors. Property Holdings has a number of projects which could be brought forward, providing work for construction companies. Skills Jersey has plans to help people looking for work, and to provide training for those seeking to change career. Economic Development will also be proposing a number of initiatives to increase support for small businesses.
Notes:
Supporting People most affected by the downturn:
Social Security: Maintaining Transitional Relief for Income Support
The rate of transitional relief for people receiving income support is due to be decreased in October 2009. One way of best supporting those most in need would be to maintain transitional relief at its current level for another year.
Investment: £2,008,000
Supporting those coming to the employment market for the first time, retraining those made unemployed, improve the skills base of the island:
Skills Jersey: Supporting those seeking to gain access to employment
A full package of measures has been put forward by the Skills Jersey Board designed to assist those seeking to find work, help young people & graduates and those seeking to upskill or change career.
Investment: £2,016,240
Health Department: Nursing Apprenticeship scheme
Introduction of a nursing apprenticeship scheme that would upskill current health workers and provide guaranteed employment for new entrants
Investment: £3,500,000
Increasing business support and access to finance.
Jersey Enterprise: Providing a package of measures to support Jersey companies
Enhancing and introducing new initiatives that will provide local companies with the appropriate levels of support and opportunity that they will require to help them survive the effects of the downturn
Investment: £1,530,000
Bringing forward a programme of States maintenance/infrastructure spending
Housing Department: Maintenance
The department has a current backlog of works that could be brought forward that would provide valuable future workload for a variety of tradesmen, primarily within smaller companies
Investment: £1,700,000
Housing Department: Bringing forward Housing Stock refurbishment
Three extensive refurbishment schemes could be brought forward by the department that would provide for large contractors and sub-contractors
Investment: £9,000,000
Property Holdings: Bringing forward capital works
The department has up to eight medium to large projects that could be brought forward giving a range of work an opportunities for large and medium construction companies, plus sub-contractors
Investment: £1,750,000
Property Holdings Maintenance
States buildings have an extensive backlog of works required in order to make them compliant in terms of the most basic standards. Funding here would only allow an element of this to be tackled, however would create a significant amount of work for smaller tradesmen on the island
Investment: £3,300,000
Total additional investment: £24,796,240, split
Total value of economic stimulus: £35,931,240 including
Business Plan Funds Derived £10,000,000
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