Treasury Minister Allan Bell has delivered his sixth budget to Tynwald.

During a speech lasting about 70 minutes he said the theme of his presentation was "securing the future".

He said the 2007 budget marked a watershed in the development of the economy of the Isle of Man, after five years of real achievement.

Successes included creating one of the fastest growing economies in Europe, and resolving the immediate threats from the European Union and the Organisation for Economic Co-operation and Development which, Mr Bell said, could have seriously damaged the Island.

He also referred to success in growing government revenues to ensure the continued provision of high quality public services for the people of the Isle of Man.

But he sounded a major note of caution, saying now, more than ever, the Island must guard against complacency as it would have to confront fresh challenges every bit as testing as those recently combated.

An important plank of Mr Bell's presentation was the renegotiation of the Customs Sharing Agreement with the United Kingdom which, he said, was a vital first step towards the main goal of securing the future. Mr Bell said it would give a more secure agreement and a more predictable flow of future tax revenues. In removing revenue volatility, he said, the Island's future success would depend on economic growth, and he had established over ?30 million in various funds to stimulate future expansion.

Explaining the new mechanism for sharing VAT receipts, the Minister said it would allocate VAT and other revenues based on relative economic growth, that is the difference between economic growth in the Isle of Man and the United Kingdom. He said it was therefore clear that, in developing the economy into the future, growth itself would become the most important issue for everybody in Tynwald. This, Mr Bell said, was because without economic growth the government would not have the increases in revenues that could be used to maintain and improve upon the Island's public services. He said this was the reason he had put economic growth at the heart of his 2007 budget.

In conclusion the Minister said the challenge now was for the business community to "wake up from any collective complacency and rise to the opportunities which had been created.

He was very confident of the Island maintaining its outstanding success in the time ahead. Nevertheless, he also believed the government needed to display a more cautious approach to its spending commitments during the transitionary period, to avoid overstretching itself.

Mr Bell said this would challenge both Tynwald and, in particular, the civil service and its culture, to streamline government services to ensure the taxpayer got the very best value for money from all the Island's investments. He said improving efficiency in this area would release existing money to be redirected into essential front line services.

Key elements of the 2007-08 Isle of Man Budget:

?16.3 million, or a 3.1% increase, in net departmental revenue spending on public services.

Personal Allowance Credit band remains at ?2,500 for individuals who do not fully utilise personal allowances, with the maximum Personal Allowance Credit increased by 20% to ?420.

Income tax personal allowances increased by 2.1% to ?8,850 for single persons, and ?17,700 for married couples.

Personal income tax standard rate stays at 10%, with the higher rate remaining at 18%.

Tax cap on total income tax payable per person remains at ?100,000 or ?200,000 per married couple.

Additional funding for fuel efficiency in public sector housing.

Exempt companies abolished from April 5, 2007.

Corporate charge remains at ?250 per company, but to be collected as part of an increased Company Annual Return fee, set by the Financial Supervision Commission, reducing bureaucracy for companies.

?36.5 million surplus expected in 2007-08; ?49.9 million in the current year.

Capital programme at ?102.9 million to be financed without recourse to external borrowing.

?86 million to be transferred to various Reserves over the current and next year.

Income Tax personal allowance increased by 2.1%.

Single Person's Allowance ?8,850; Married Couple's Allowance ?17,700; Single Parent Allowance ?14,890 (including Single Person's Allowance); Registered Blind Person Additional Allowance and Disabled Person Allowance ?2,720.

Thresholds at which higher rate becomes payable: Single Person increased to ?10,500 of taxable income; Married Couple increased to ?21,000 of taxable income, fully transferable between husband and wife.

Single persons may have incomes of ?19,350 before paying tax at the higher rate of 18%, while for married couples the figure is ?38,700.

The 2007 budget debate is being broadcast live on Manx Radio's AM frequency, of 1368.