In the face not only of recessionary pressures but also with the prospect of budgetary deficits running to tens of millions of pounds which must be addressed as a priority, this is clearly not the time for give-away proposals of any sort. It is, therefore, entirely understandable that Senator Ozouf’s first Budget focuses on raising extra revenue through essentially predictable initiatives.
Notably, the latest in the line of Island politicians to have held the unofficial title of Chancellor is recommending inflation-busting increases in duty. With the retail price index currently in negative figures, this was always going to be the case, but the ten per cent tax increases proposed on fuel and tobacco and the six per cent on alcohol are, to say the least, substantial.
Moreover, the general strategy signalled for tobacco and drink will put the final nail in the coffin of low-duty Jersey. Senator Ozouf and his advisers believe that levels of duty paid in the Island should ultimately match those in the UK.
In the present atmosphere of general restraint, it was always a safe bet that the Budget would recommend a freeze on personal tax allowances. This, however, will lead to the usual wailing and gnashing of teeth among those who feel, with varying degrees of justification, that the tax burden is too heavy. Of more concern is the plight of those on lower incomes who, under frozen allowances, would be drawn into the tax net, adding to the severe financial pressures that so many already face.
Meanwhile, aside from readjusting duty and maintaining revenues from income tax, Senator Ozouf was, in current circumstances, likely to look for new sources of public funds.
Some new money could now come from Stamp Duty on share transfer properties, which have been exempt from this category of taxation for far too long, but the most controversial ‘extra’ will almost certainly be vehicle emission duty. If this is introduced, purchasers of ‘gas guzzlers’ might find themselves paying an extra £1,250 for the privilege of owning vehicles spewing out large volumes of damaging carbon dioxide.
All in all, the Senator’s first Budget is hardly likely to win him a resounding round of applause. In spite of this, he might hope to earn grudging respect for having reacted appropriately to harsh circumstances and for having had the courage to avoid courting popularity at the expense of prudence.courting popularity at the expense of prudence.
