THE Island's Budget for 2010-2011 was revealed by Treasury Minister Allan Bell MHK in February and was described as one of the most difficult in recent Manx political history.
Mr Bell presented the Budget in Tynwald and said it was the first instalment of a five year strategy to re-balance the government’s finances following the reduction in the Island's share of VAT income.
The five year strategy was a combination in reductions in the capital expenditure, reductions in revenue spending, increases in taxation and charges and the use of reserves.
The main features of the 2010/11 Budget:
- A £37.1 million or 6.5 percent reduction in net revenue spending overall (but no decrease in net spending on health and social care)
- Income tax higher rate for individuals to increase from 18 percent to 20 percent - raising £9.4 million
- Implementation of a one percent increase in employee National Insurance Contributions (approved by Tynwald in November 2009) raising £7 million
- £15 million transfer from reserves
Mr Bell also announced an 18 percent increase in Personal Allowance Credit for the least well off members of society, a one percent increase in income tax personal allowance, £96 million capital spending, a freeze on salary budgets and the loss of nearly 100 staff posts by non-replacement.
The Minister stressed that there have been no redundancies simply the culling of posts which had not been filled and were therefore counted as "natural wastage".
He explained: "This is a budget that paves the way for change while maintaining support for the least well off in our society. There are further and greater challenges ahead but we now have a clear plan to manage the transition to a new era of government fit for the future.
"The Isle of Man is not alone in facing fiscal difficulties and we are in a relatively strong position. Our economy is still healthy and we are in a resilient and resourceful small nation with a track record of working together to make the most of changing circumstances."
Also see: The 2010-11 budget at a glance
