Jersey’s Government Plan and the proposed budget changes – how it will impact you

It brings together revised spending and investment plans to support the five strategic priorities, and addresses legacy issues like the new hospital, government headquarters, Fort Regent and IT infrastructure.

Working on the assumption that everyone first wants to know the headline budget changes that will affect them…

2022 Budget measures

Alcohol and tobacco

• No increase for beer and cider
• 8p increase on a 750ml bottle of wine
• 85p increase on a litre of spirits
• 65p increase on a packet of 20 king size cigarettes
• £3.55 increase on a 50g tobacco pouch

Fuel and vehicles

• 5p increase per litre on road fuel duty (3p goes into Climate Emergency Fund)
• Vehicle Emissions Duty increases from 2.5% up to 70.8% (greater increases for vehicles with higher emissions)

Income tax allowances

• £550 increase in single persons tax exemption threshold
• £850 increase for a married couple
• £250 increase in second earners allowance

GST

• A reduction of the import GST de minimis level to £60 from 1 January 2023 (currently £135)

Chief Minister, Senator John Le Fondré (pictured), said: “This, the final Government Plan of our term of office, maintains our commitment to the priorities we set at the start of this Government’s term of office, and also focuses on the major challenges we are facing, such as population and migration, housing, climate change and island identity.

“This plan establishes the basis for a strong financial legacy, with recurring savings of £54 million out of a target of £60 million. We will refinance past pension liabilities to save more than £3.6 billion and have moved from prior year (PYB) to current year (CYB) taxation, which will result in £345 million of additional receipts over the next 20 years. We are still counting the cost of Covid-19, and this plan addresses its impact on children through targeted youth support, on mental and physical health through a recovery programme, and on our economy through a new economic framework.

“Our vaccination programme has been one of the most successful in Europe, we have kept schools open more consistently than the UK and many European countries, and our investment in IT infrastructure set the foundation for the States Assembly becoming the first parliament in the Commonwealth to meet online.

“We are still committed to sustainable public finances and, through continued efficiencies and financial rebalancing, we are aiming to return to balanced budgets by 2023.

“The Plan’s careful stewardship of public finances will allow us to leave a legacy of financial stability and meaningful investment. As a Council of Ministers, we are committed to long-term planning; building foundations that will benefit not only Islanders living and working now, but the generations that will follow them. This Plan is a powerful step in achieving that end.”

The Minister for Treasury and Resources, Deputy Susie Pinel, said: “This Plan focuses on recovery and renewal for Islanders and our economy, by outlining a plan for the long-term sustainability of Government finances; enabling us to build a better future together.

“After six years of growth, our economy, like others across the globe, declined sharply in 2020 as many sectors had to close or run reduced services. However, the latest forecast from the International Monetary Fund is for global growth of 6% this year. We are planning for a strong recovery for Jersey, and will continue to support our business community through a range of measures, responding to changing circumstances as required.

“We will run our finances at a deficit until we begin to see recovery, and we aim to return to balanced budgets over the period of this plan. We will continue to invest in our public services and our Common Strategic Priorities through savings and efficiencies. Islanders can be assured that they will not see any severe cuts to services or increases in taxes to cover the deficits.”

Priority areas

Responding to Covid-19

To tackle the broader harms caused by Covid-19, a new health and social recovery fund will support targeted and timely recovery projects, under the leadership of a Political Oversight Group who will champion health, social recovery and wellbeing activity across all Government departments.

Legacy challenges

This Plan establishes the basis for a strong financial legacy, built on prudence and careful management of public finances, and sets out clear principles for an ongoing financial strategy.

• Taxation reform: moving from prior year to current year taxation results in £345 million of additional receipts over the next 20 years, which is more than the expected Covid-19 debt. This means any difference can reduce other debt or be added to reserves.
• All pay negotiations for 2021 have been concluded and the historic pay differential has been all but eliminated.
• Paying back pension debt more quickly will save £3.6 billion (£700 million in real terms)
• This plan commits to further savings of £20 million in each of the years 2022, 2023 and 2024.

Revitalising the economy

The Island’s first Economic Framework will provide a common vision and strategic objectives for Jersey’s future economy, and preparation will begin for the next generation of digital networks.

• The Fiscal Stimulus Fund is providing £29.6 million of funding for projects run by a variety of trades and organisations.
• Arts, Culture and Heritage will continue to receive 1% of spending
• A Technology Fund will be created, funded by part of the dividend received from the recent sale of JT’s Internet of Things arm.
• Government will support the Island’s preparation for the Moneyval assessment in 2023 and respond to the outcomes of OECD  deliberations.

Population growth and climate change

• Carbon neutral roadmap to be debated by States Assembly
• Improved migration controls will be implemented to support a new Common Population Policy
• Andium, Ports of Jersey and SOJDC are scheduled to build more than 900 homes by 2023 (after providing 800 in the last two years)
• Sites vacated as part of the Office Strategy will be released for other purposes, including housing
• A new Government Headquarters is due to be completed by 2024, achieving annual savings of £7 million
• A new affordable purchase scheme will be introduced in 2022 to help more islanders buy their own homes

Health and wellbeing

• Community links forged during the pandemic will be developed to support the delivery of the disability strategy and to help develop a poverty strategy
• Investment in children’s dental health is planned
• Work has been commissioned into the impact of social media on young people
• Investment in the new model of community-focused Child and Adolescent Mental Health Services (CAMHS) is planned
• On-Island in-patient care is being designed to support those experiencing both acute or long-term mental ill-health conditions
• Work continues to implement the Jersey Care Model, with partnerships ensuring the right care is available to keep Islanders living independently in their own homes
• A new blueprint for a sustainable transport system, an overhaul of the bus system, and a new network of cycling and walking routes
• An extra £1 million per year has been allocated to Regeneration Projects supported by the Regeneration Steering Group, to improve the environment of St Helier

Investing in the future

• Investment in IT continues
• More funding is earmarked for Education and Home Affairs, as well as for sea defences, sewage works, Elizabeth Castle, Sea Cadets, skate parks and Fort Regent
• New hospital will be funded by debt issuance, which will be financed through future gains on the Strategic Reserve

Click here to read the full proposed Jersey Island Plan 2022-25.