TREASURY Minister Eddie Teare has appealed to the Isle of Man’s business community that the government needs feedback from the private sector as it tackles the biggest financial crisis to hit the Island for three decades.
Speaking this morning less than 24 hours after delivering his first budget speech, Mr Teare told an audience of the Island’s leading businessmen that the government believed it had a “creditable plan” to sort out the Isle of Man’s economy, but stressed that it was a team effort which required support from the business community.
Mr Teare made his point at the end of his 45 minute speech when he described the Isle of Man’s economic future as “a fine balancing act”. He added, “I invite anyone to come along and talk to us. We need feedback from the business community. My door is always open.”
He was addressing a Budget Breakfast hosted by the Junior Chamber of Commerce and sponsored by the ILS Group at Mount Murray when around 200 business men and women from across the Manx economic community listened to Mr Teare explain the contents of his first budget.
He said that the VAT shortfall of £75 million over the next three years had to be rebalanced and that the medium term strategy to resolve this had led to the decision to use money from the £1.36 billion reserve fund.
Mr Teare’s words echoed the most striking comment made yesterday during the day-long Budget debate when Chief Minister Allan Bell told Tynwald that the decision to use money from reserves had been taken because “a rainy day” had arrived.
Mr Bell said yesterday, “These reserves were gathered for a rainy day - that’s what they were put there for. And I don’t know about you but I’m soaking wet!”
Mr Teare also defended government’s spending policy in recent times and made a comparison between the decisions taken in the last two decades to those taken by the Victorians. “When we had the money we did what the Victorians did and spent the money on the Island’s infrastructure, which will hopefully hold the Isle of Man in good stead for the future.”
He stressed a point often mention by the Chief Minister that “times have changed” and that the Isle of Man is “in a new era” and accepted that some of the policies of the past could not be sustained in the future, highlighting that there would be continued support for various sectors, but also pointing out that the construction industry had been “too reliant” in the past on the public sector, without going into detail.
Based on projected figures, Mr Teare added that he anticipated the economy to grow 3% in the next year and that inflation would probably also be 3%. Capital expenditure for the coming year will be £83 million. An overall surplus of £16 million is anticipated for the year.
The Budget has clearly been largely well received by the business community and no mention was made during questions of the much criticised decision to close the pre-school nurseries, suggesting that the government’s view had been accepted that the private sector would step in to cover the need.
However, it’s obvious from the numerous lengthy statements made by various Ministers yesterday that there are other cost saving measures in the pipeline in the future and that these may not be so palatable.
Mr Teare hinted that Tynwald also needs to address a number of issues such as the size of government, the number of public sector employees and duplication of services across departments.
However, Mr Teare did not mention one of the most contentious issues in the commercial sector at present where government is seen to be competing on a commercial level in the business sector in a number of areas, including media, printing and retail - although a statement on the MEA retail outlets is expected during April.
Mr Teare answered a handful of questions at this morning’s Budget Breakfast, but the questions were not hostile, suggesting a general acceptance that the Minister’s first Budget has so far, been considered to contain some basic economic common sense and a medium term plan which appears to be achievable.
