Falklands : Falklands - Appropriation Bill 2008
Submitted by Falkland Islands News Network (Juanita Brock) 28.05.2008 (Article Archived on 11.06.2008)
This Bill contains the proposals that will be discussed in Select Committee. The Bill as amended will be presented to Legislative Council on Friday, 30 May 2008
THE APPROPRIATION BILL 2008
MR SPEAKER, HONOURABLE MEMBERS
1. THE PURPOSE OF THIS BILL IS TO AUTHORISE THE WITHDRAWAL OF £43,865,530 FROM THE CONSOLIDATED FUND FOR THE SERVICE OF THE FINANCIAL YEAR BEGINNING 1 JULY 2008. THE SCHEDULE TO THE BILL SUMMARISES THE APPROPRIATION UNDER THREE HEADINGS: FIRSTLY, £34.4 MILLION IS allocated TO THE OPERATING BUDGET, WHICH REPRESENTS ESTIMATED EXPENDITURE NET OF INTERNAL CHARGES OF £1 MILLION AND CAPITAL CHARGES OF £3.2 MILLION. SECONDLY, £4.5 MILLION IS ALLOCATED TO FUND TRANSFERS AND thirdly, £4.9 MILLION IS ALLOCATED TO TRANSFER PAYMENTS.
2. AS USUAL, BEFORE DEALING WITH THE DETAIL OF THE 2008/2009 BUDGET, I WILL BRIEFLY REVIEW THE CURRENT YEAR. THE DRAFT ESTIMATES SHOW THAT THE OUT-TURN AT 30 JUNE 2008 IS EXPECTED TO RESULT IN A BUDGET DEFICIT OF £2.5 MILLION COMPARED TO A SURPLUS OF £322,000 FORECAST A YEAR AGO. THE MAIN REASONS FOR THIS SHORTFALL ARE A NET REDUCTION IN INVESTMENT RETURNS OF £1.7m AND AN INCREASE IN THE TRANSFER PAYMENTS BUDGET OF £1.1 MILLION. IT IS ALSO FORECAST THAT OPERATING EXPENDITURE WILL BE MAINTAINED AT ITS ORIGINAL BUDGETED LEVEL.
3. AT 30 JUNE 2008 IT IS ESTIMATED THAT THE BALANCE OF THE CONSOLIDATED FUND WILL AMOUNT TO £91 MILLION. THIS represents just over 2 ½ YEARS WORTH OF OPERATING EXPENDITURE, AND IS AN APPROPRIATE POINT TO START THE REPORT ON THE 2008/2009 BUDGET.
4. OPERATING REVENUE FOR 2008/2009 IS FORECAST AT £45.8 MILLION AND THE SUBMISSIONS FOR TOTAL EXPENDITURE, excluding depreciation, ARE estimated £44.9 million. THIS RESULTS IN a bUDGET surplus OF £900,000. THE prime objective OF THE BUDGET STRATEGY, TO PRODUCE at least a balanced budget, HAS therefore been ACHIEVED. HOWEVER, the budget strategy WAS EXPANDED THIS YEAR TO include the development of a medium term fnancial plan. the aim of this plan is to make bottomline annual improvements of £1 million over the next 5 years consisting of reductions in expenditure Of £1/2 million and additional income OF £1/2 million. the prime objectives of the plan are related to the desire to reduce the dependence of government on illex licEnce fee revenues and to generate funding for redirection towards island plan aspirations. although the plan is in its early stages of development, the options selected so far have contributed to the estimated surplus but have not met the planned target. furthermore, At this stage, the balance between additional income and reduced expenditure is not equal and this will be addressed over the coming months as the plan progresses. It is intended that much more public consultation will take place in the future development of the medium term financial plan along with the Islands plan and the economic and fiscal strategies which are essential to support them.
5. OPERATING REVENUE SHOWS AN INCREASE OF £2.6 MILLION ON THE ORIGINAL ESTIMATE FOR THE CURRENT YEAR. THE MAIN POSITIVE VARIANCES ARE AN ESTIMATED £1.3 MILLION FROM TAXATION, £780,000 FROM FISHERIES, £750,000 FROM CUSTOMS AND £280,000 FROM AVIATION, PARTLY OFFSET BY A REDUCTION IN INVESTMENT INCOME OF £629,000. THE REVENUE FORECAST INCLUDES FISHERIES LICENCE FEE INCOME INSERTED AT £16.2 MILLION. THIS IS THE MAIN SOURCE OF GOVERNMENT REVENUE AND REPRESENTS 35% OF THE TOTAL. AFTER THE POOR RESULTS OF RECENT ILLEX SEASONS THE CURRENT SEASON HAS SHOWN SOME STABILITY AND THE REVISED ESTIMATE FOR LICENCE FEE INCOME FROM ALL SPECIES IS £15.5 MILLION. THE £16.2 MILLION ESTIMATE PROVIDES FOR SOME IMPROVEMENT FOLLOWING AN INCREASE IN FEES FOR LOLIGO.
6. THIS BRINGS ME TO THE DRAFT ESTIMATES OF OPERATING EXPENDITURE WHERE A TOTAL of £38.7 MILLION IS INSERTED. FOLLOWING ADJUSTMENTS MADE AT THE RECENT BUDGET MEETINGS OF THE STANDING FINANCE COMMITTEE THIS FIGURE IS £1.8 million MORE THAN THE ORIGINAL ESTIMATE FOR THE CURRENT YEAR. THIS IS THE RESULT OF A LONG PROCESS OF DISCUSSIONS BETWEEN TREASURY AND MANAGERS, AND SEVERAL DAYS OF DEBATE BY honourable members. DURING THE PROCESS, AND STARTING FROM A BASE OF EXPENDITURE PROJECTED THIS TIME LAST YEAR, CONSIDERATION HAS BEEN GIVEN TO PROPOSED SAVINGS, ADDITIONAL SPENDING PROPOSALS AND MEDIUM TERM FINANCIAL PLAN OPTIONS WHICH ARE ALL SUBJECT TO APPROVAL BY THE BUDGET SELECT COMMITTEE. THE ADDITIONAL SPENDING PROPOSALS INCLUDE A PROVISION OF £300,000 FOR A PAY AWARD FOR GOVERNMENT EMPLOYEES SUBJECT TO A DISTRIBTION METHOD TO BE DEVISED BY THE CHIEF EXECUTIVE AND APPROVED BY EXECUTIVE COUNCIL. THERE IS A NEED TO ADDRESS THE INFLUENCE ON PAY OF MARKET FORCES AND PERFORMANCE. THEREFORE IT SHOULD NOT BE ASSUMED THAT AN INFLATION ADJUSTMENT WILL FORM PART OF THE PAY AWARD.
7 THE DRAFT ESTIMATES FOR TRANSFER PAYMENTS AMOUNT TO £4.9 MILLION. THIS IS £100,000 more than THE ORIGINAL ESTIMATE FOR THE CURRENT YEAR. HOWEVEr, THERE ARE SIGNIFICANT VARIATIONS ON INDIVIDUAL SCHEMES. THERE ARE PROPOSED INCREASES IN SUBSIDIES FOR THE NEW FERRY SERVICE AND TOURIST BOARD ANd ADDITIONAL allocations FOR IMPROVEMENTS TO SERVICES PROVIDED BY bfbS and for meeting an anticipated increase in drawdowns from the holiday credit scheme. THESE ARE OFFSET BY REDUCTIONS IN SUBSIDIES FOR THE WOOL COMPANY AND MEAT COMPANY AND THE DELETION OF THE FIDC SUBSIDY FOR ONE YEAR.
8 FUND TRANSFERS OF £4.5 MILLION ARE INCLUDED IN THE DRAFT ESTIMATES. THIS IS AT THE SAME AMOUNT AS THE ORIGINAL ESTIMATE FOR THE CURRENT YEAR AND FOR THE SAME PURPOSES.
9 all operating revenue is required to be paid into the consolidated fund. all operating expenditure, transfer payments and fund transfers are required to be paid from the consolidated fund. as mentioned at the start of my presentation, this is the purpose of the appropriation bill.
10. moving now to PROPOSED CAPITAL EXPENDITURE FOR 2008/09 TO BE MET FROM THE CAPITAL EQUALISATION FUND. THIS IS inserted in the draft estimates at £5.8 million, or £3.6 million net of capital receipts. THE PROJECTIONS for the following two years amount to a net £5.1 million. As a result the net capital programme for the next 3 years toals £8.7 mllion. this is well wIthin the £12 mIllIon 3 year rolling programme strategy on which the annual £4 MILLION contribution to the capital equAlisation fund was based. THE projections for future years ARE NOT APPROVALS TO SPEND AT THIS STAGE AND FURTHER WORK WILL BE REQUIRED TO FIRM them UP.
11. i NOW TURN TO REVENUE MEASURES:
11.1 NEXT YEAR WILL MARK THE 70TH ANNIVERSARY OF THE INTRODUCTION OF INCOME TAX BUT NO CHANGES ARE PROPOSED TO RATES OR ALLOWANCES TO CELEBRATE THE OCCASION. IT IS USUAL FOR RATES AND ALLOWANCES TO BE REVIEWED PERIODICALLY AND THEY WERE ADJUSTED FROM 1 JANUARY THIS YEAR FOLLOWING THE 2007/08 BUDGET DELIBERATIONS. IT IS CONSIDERED THAT NO FURTHER ADJUSTMENTS SHOULD BE MADE UNTIL THE AFFECT OF ANY CHANGES ON THE ECONOMY CAN BE ASSESSED FOLLOWING THE ARRIVAL THE NEW ECONOMIC ADVISER IN JULY.
11.2 HOWEVER, IT IS PROPOSED THAT AN EMPLOYMENT TAX SHOULD BE REINTRODUCED FROM 1 JANUARY 2009. MEDICAL SERVICES LEVY, OR MSL FOR SHORT, WAS THE NAME GIVEN TO AN EMPLOYMENT TAX INTRODUCED IN 1979 AND ABOLISHED IN 1994. AS MSL WILL BE REMEMBERED BY SOME AS A POPULAR TAX I WILL REFER TO IT BY THAT NAME IN CELEBRATION OF ITS PROPOSED RESURRECTION ON WHAT WOULD HAVE BEEN ITS 30TH BIRTHDAY. THE POSSIBLE REINTRODUCTION OF MSL HAS BEEN RAISED SEVERAL TIMES OVER RECENT YEARS FOLLOWING THE EVER INCREASING COSTS OF HEALTH SERVICE PROVISION. OUT OF SEVERAL TAX RAISING OPTIONS PUT FORWARD UNDER THE MEDIUM TERM FINANCIAL PLAN, MSL WAS THE ONLY ONE SELECTED THUS FAR. IT IS PROPOSED THAT MSL SHOULD BE PAYABLE MONTHLY ON THE GROSS PAY OF EMPLOYEES AT THE RATES OF 2% BY THE EMPLOYER AND 2% BY THE EMPLOYEE. FOR THE SELF EMPLOYED, THE RATE WOULD BE 2% OF THE ANNUAL NET PROFITS BEFORE TAX. THE FORMER LEGISLATION WOULD NEED TO BE REVIEWED AND MODIFIED SLIGHTLY BEFORE BEING SUBMITTED TO EXECUTIVE COUNCIL FOR ONWARD REMISSION TO THIS HOUSE. IT IS ESTIMATED THAT THIS REVENUE RAISING MEASURE WOULD GENERATE NET INCOME OF £900,000 IN A FULL YEAR OR £400,000 IN THE FORTHCOMING FINANCIAL YEAR AND THIS HAS BEEN TAKEN INTO ACCOUNT IN THE DRAFT ESTIMATES. ALTHOUGH NOT DIRECTLY RELATED TO THE PROVISION OF HEALTH SERVICES, MSL WOULD REPRESENT AROUND 16% OF THE NET COSTS OF PROVIDING THOSE SERVICES.
11.3 TO KEEP REVENUES IN PACE WITH INFLATION, AND IN LINE WITH THE HEALTH OF THE NATION INITIATIVES, IT IS PROPOSED TO INCREASE CUSTOMS IMPORT DUTY ON CIGARETTES BY 17%, TOBACCO AND CIGARS BY 8% AND ALCOHOLIC BEVERAGES BY 3%. THESE INCREASES WOULD, FOR EXAMPLE, ADD AN EXTRA 48 PENCE ON A PACKET OF 20 CIGARETTES, 52 PENCE ON 50 GRAMMES OF TOBACCO AND 30 PENCE ON A LITRE OF SPIRITS. AN ADDITIONAL £30,000 HAS BEEN ADDED TO THE HEALTH BUDGET TO COVER THE ESTIMATED COSTS OF PROVIDING SMOKING CESSATION AIDS AND SUPPORT FREE OF CHARGE. THE INCREASE IN DUTY ON TOBACCO PRODUCTS IN EXCESS OF INFLATION IS BASED ON A CALCULATION TO RECOVER THOSE COSTS.
11.4 A 10% INCREASE TO £16.50 AND £5.50 RESPECTIVELY IN THE CRUISE VESSEL PASSENGER LEVY WAS AGREED LAST YEAR FROM 1 JULY 2007. THE DELAYED IMPLEMENTATION DATE REFLECTED THE ADVANCE NOTICE REQUESTED BY TOURISM INDUSTRY REPRESENTATIVES DUE TO THE IMPACT ON CRUISE OPERATORS. TO KEEP PACE WITH INFLATION ADVANCE NOTICE OF A FURTHER INCREASE OF APPROXIMATELY 9% TO £18 AND £6 RESPECTIVELY FROM 1 JULY 2009 IS PROPOSED.
11.5 HARBOUR DUES AND CUSTOMS ENTRANCE AND CLEARANCE FEES WERE LAST INCREASED BY 3% FROM 1 JULY 2007 AND, IN ORDER NOT TO FALL TOO FAR BEHIND INFLATION, A 3% INCREASE IS AGAIN PROPOSED. MEMBERS MAY RECALL THAT THE SCALE OF CHARGES FOR HARBOUR DUES WAS EXTENDED LAST YEAR TO TAKE ACCOUNT OF THE FACT THAT LARGER PASSENGER VESSELS NOW VISIT THE ISLANDS. NO FURTHER STRUCTURAL CHANGE TO THE SCALE OF CHARGES IS THEREFORE CONSIDERED APPROPRIATE AT THIS STAGE.
11.6 VEHICLE LICENCE FEES WERE LAST INCREASED BY 3% WITH EFFECT FROM 1 JULY 2007. AN INCREASE OF 5% IS NOW PROPOSED TO BETTER REFLECT THE CLERICAL EFFORT INVOLVED IN THE PRODUCTION OF VEHICLE DOCUMENTS. THIS WOULD, FOR EXAMPLE, INCREASE THE FEE FOR A LAND ROVER FROM £99 TO £104. IT IS ALSO PROPOSED THAT THE FEES FOR VEHICLE REGISTRATION, DRIVERS LICENCE, DRIVERS TEST, FIREARMS AND AMMUNITION REGISTRATION AND LICENCE SHOULD BE INCREASED BY 5% TO MORE ACCURATELY REFLECT THE ASSOCIATED ADMINISTRATIVE COSTS.
11.7 IN VIEW OF THE FACT THAT GOVERNMENT HOUSE RENTS ARE LOWER IN THE PUBLIC THAN IN THE PRIVATE SECTOR, THE POLICY IN RECENT YEARS HAS BEEN TO INCREASE RENTS BY MORE THAN THE RATE OF INFLATION. IT IS THEREFORE RECOMMENDED THAT A GENERAL RENT INCREASE OF 4% BE APPLIED TO GOVERNMENT HOUSES. THERE ARE SOME TENANTS IN FLATS WHO ARE PROVIDED WITH COMMUNAL HEATING SCHEMES. THE CHARGE FOR THIS IS RECOVERED ALONG WITH RENT ON A MONTHLY BASIS. AN INCREASE OF 12.5% IS PROPOSED IN LINE WITH THE INCREASE IN FUEL PRICE. IN ORDER TO PROVIDE CONSISTENT PROTECTION TO LOW INCOME TENANTS IT IS ALSO PROPOSED THAT THE ALLOWANCES AND THRESHOLDS UNDER THE RENT REBATE SCHEME ARE INCREASED BY 4% AND 3% RESPECTIVELY.
11.8 WHEN WATER CHARGES WERE CONSIDERED LAST YEAR, A 12.5% INCREASE WAS AGREED AS PART OF A MOVE TOWARDS FULL COST RECOVERY. THE CURRENT DEFICIT ON THE WATER SUPPLY SERVICE IS £58,000 AND IT IS THEREFORE PROPOSED THAT A SIMILAR INCREASE SHOULD BE APPLIED FROM 1 JULY 2008 TO CONTINUE THE MOVE TOWARDS FULL COST RECOVERY.
11.9 A SEPARATE REFUSE COLLECTION CHARGE FOR NON-DOMESTIC PROPERTIES WAS INTRODUCED IN 2004/05. AN ANNUAL CHARGE OF £93 IS CURRENTLY PAYABLE FOR EACH WHEELIE BIN OR £280 FOR EACH LARGE BIN. THERE IS A SIGNIFICANT DEFICIT WITH CHARGES AT THEIR CURRENT LEVEL. FOR THIS REASON IT IS RECOMMENDED THAT REFUSE COLLECTION CHARGES ARE INCREASED BY 20% FOR 2008/09 AND 10% PER ANNUM THEREAFTER UNTIL THE BREAKEVEN POINT IS REACHED IN 2012/13.
11.10 THE DOMESTIC PROPERTY SERVICE CHARGE IS CURRENTLY £300 PER ANNUM WITH A 50% REDUCTION FOR PENSIONERS. IN ORDER TO REFLECT THE INCREASES PROPOSED IN WATER AND REFUSE CHARGES FOR NON-DOMESTIC PROPERTIES ON COST RECOVERY GROUNDS IT IS PROPOSED THAT THE SERVICE CHARGE IS INCREASED TO £348 WITH A 50% REDUCTION FOR PENSIONERS. IT SHOULD BE NOTED THAT THE SERVICE CHARGE IS PAYABLE BY TENANTS OF GOVERNMENT HOUSING AND THAT THE RENT REBATE SCHEME ALSO COVERS THIS CHARGE. TO ENSURE THAT ALL HOUSEHOLDERS ON LOW INCOMES ARE AFFORDED EQUITABLE PROTECTION, IT IS PROPOSED THAT THE ALLOWANCES AND THRESHOLD UNDER THE SERVICE CHARGE REBATE SCHEME SHOULD BE INCREASED BY 3%. PLEASE NOTE THAT A PROPOSAL TO IMPOSE A MEDIA ACCESS FEE TO RECOVER PART OF THE COST OF BOTH RADIO AND TV SERVICES FUNDED BY GOVERNMENT, AND FOR IT TO BE ADDED TO THE SERVICE CHARGE, WAS NOT APPROVED BY EXECUTIVE COUNCIL.
11.11 DUE TO THE LARGE INCREASES IN FUEL PRICES OVER RECENT MONTHS IT IS PROPOSED THAT THE ELECTRICITY TARIFF IS INCREASED BY 2 PENCE TO 19 PENCE PER UNIT FROM 1 JULY. BASED ON CURRENT FUEL PRICES THIS INCREASE IS NECESSARY IN ORDER TO BREAK-EVEN AT THE STANLEY POWER STATION. IT SHOULD BE NOTED THAT WERE IT NOT FOR THE EFFICIENCIES GAINED BY HAVING THE WIND FARM A FURTHER INCREASE OF AROUND 3 PENCE PER UNIT WOULD HAVE BEEN REQUIRED BASED ON FULL COST RECOVERY. HAVING DUE REGARD TO THE EVER INCREASING FUEL PRICES AND NOW THAT THE WIND FARM HAS PROVED ITSELF PROPOSALS ARE BEING INVESTIGATED TO EXPAND IT. AN ALLOCATION HAS BEEN MADE IN THE CAPITAL PROGRAMME TO ENABLE THIS INVESTMENT TO TAKE PLACE, STARTING NEXT YEAR, SUBJECT TO THE APPROVAL OF THE BUDGET SELECT COMMITTEE.
11.12 THE PRICES FOR QUARRY PRODUCTS HAVE REMAINED STATIC FOR SEVERAL YEARS. HOWEVER, SINCE MOST OF THE PRODUCTION COSTS ARE FIXED, SIGNIFICANT DEFICITS HAVE BEEN APPARENT IN RECENT YEARS. TO MAKE A GREATER CONTRIBUTION TO THOSE FIXED COSTS AND TO HELP RECOVER THE INCREASED VARIABLE COSTS IT IS PROPOSED THAT PRICES FOR QUARRY PRODUCTS TO THE PRIVATE SECTOR ARE INCREASED BY 20%.
11.13 GIVEN THE INCREASE IN THE COST OF FUEL IT IS PROPOSED THAT THE CHARGE MADE BY THE PWD FOR EMPTYING A SEPTIC TANK IS INCREASED FROM £100 TO £110.
11.14 POSTAL CHARGES HAVE BEEN REVIEWED BIENNIALLY SINCE 2000 WITH THE LAST CHANGES IMPLEMENTED IN JULY 2006. THE POSTMASTER HAS CARRIED OUT THE NORMAL REVIEW AND IT IS PROPOSED THAT AN INFLATION ADJUSTMENT SHOULD BE MADE TO POSTAGE RATES FROM 1 JULY 2008. IT IS ANTICIPATED THAT THE REVISED RATES WILL MAINTAIN RATHER THAN INCREASE THE PROFITABILITY OF THE POSTAL SERVICE.
11.15 IT IS PROPOSED THAT AN INFLATION ADJUSTMENT BE APPLIED TO VARIOUS CHARGES LEVIED BY THE DEPARTMENT OF AGRICULTURE.
11.16 IT IS PROPOSED THAT THE STANLEY HOUSE SCHOOL HOSTEL FEES BE INCREASED BY 3% FROM THE BEGINNING OF THE NEXT SCHOOL YEAR.
11.17 AS PART OF THE RECENT REVIEW OF FIGAS, IT IS PROPOSED THAT FARES AND FREIGHT CHARGES ARE INCREASED BY 20% AND THAT A FUEL SURCHARGE IS INTRODUCED FROM 1 JULY. THESE PROPOSALS FORM PART OF A PUBLIC REPORT SETTING OUT OPTIONS OF HOW FIGAS COULD IMPROVE THE WAY IT OPERATES AND GENERATE MORE INCOME OR REDUCE COSTS FOLLOWING THE DEVELOPMENTS MADE TO THE ROAD AND SHIPPING COMPONENTS OF OUR NATIONAL TRANSPORT SYSTEM DESIGNED TO ENABLE GREATER INTERGRATION. COMMENTS ON THE OPTIONS ARE WELCOME AND SHOULD BE SENT TO THE GENERAL MANAGER, FIGAS.
12. moving NOW TO PENSION BENEFITS, CONTRIBUTIONS AND SOCIAL PAYMENTS:
12.1 The last discretionary adjustment to old scheme public service pensions and Falkland LandHoldings pensions was a 3% increase from 1 July 2007. this reflects the provisions of the falkland iSLANDS pensions scheme where an annuity with a guaranteed 3% annual increase has to be purchased as a contribution towards inflation protection. For the same reason it is again proposed that old scheme public service pensions and falkland landholdings pensions be increased by 3% from 1 July 2008. These pensions are payable from the Old Scheme Fund and the funding implications for them are kept under review by the Government Actuaries Department.
12.2. Retirement pensions and contributions were increased last year by 5%. From 1 January 2009 It is proposed that THE VOLUNTARY OVERSEAS CONTRIBUTION RATE SHOULD BE INCREASED BY approximately 4% IN LINE WITH INFLATION AND THAT THE RESIDENT RATES OF CONTRIBUTION ARE INCREASED BY a slightly higher percentage IN ORDER TO CONTINUE TO CLOSE THE GAP BETWEEN THESE TWO RATES. this would, for example, increase the Employer AND EMPLOYEE RATES TO £11.50 PER WEEK and the self-employed rate TO £23.00 PER WEEK. IT IS ALSO PROPOSED THAT THE EARNINGS LIMIT THRESHOLD SHOULD BE INCREASED TO £180 PER WEEK.
12.3. It is proposed that RETIREMENT pensions should be increased by APPROXIMATELY 3%, from 1 January 2009, as follows:
Standard Rate TO £118.00 PER WEEK
Married Couple’s Supplement TO £66.00 PER WEEK
and the Ex gratia PENSiON TO £106.00 PER WEEK
IN ORDER FOR IT TO REMAIN AT 90% OF A STANDARD RATE PENSION.
12.4 RETIREMENT PENSION CONTRIBUTIONS ARE PAID INTO THE RETIREMENT PENSIONS EQUALISATION FUND AND RETIREMENT PENSIONS ARE PAID FROM THAT FUND. THE FUNDING IMPLICATIONS FOR THESE PENSIONS ARE ALSO KEPT UNDER REVIEW BY THE GOVERNMENT ACTUARIES DEPARTMENT. the Provision of a subsidy of £300,000 per annum continues to be included in the Draft Estimates as a transfer to the Fund. This subsidy is necessary to make up the funding shortfall CAUSED BY THE resident contribution rate BEING lower than the OVERSEAS Rate WHICH IS BASED ON AN ACTUaRIAL CALCULATION.
12.5 IT IS PROPOSED THAT A CHRISTMAS BONUS EQUIVALENT TO ONE WEEK’S PENSION SHOULD CONTINUE TO BE PAID TO THOSE PENSIONERS IN RECEIPT OF A RETIREMENT OR EX-GRATIA PENSION WHO RESIDE IN THE FALKLAND ISLANDS.
12.6. It is proposed that WELFARE, ATTENDANCE AND FOSTERING ALLOWANCES ARE INCREASED BY APPROXIMATELY 3% FROM 1 JULY 2008.
12.7. following the large increases IN THE PRICE OF KEROSENE it is proposed that the winter fuel ALLOWANCE FOR PENSIONERS should be increased by 15% to £460 for THE 2008 WINTER. it is also proposed that the income threshold should be increased by 3% to £15,300.
12.8. The Child Allowance is currently £53.50 per month per child and has been at that rate since 1 January 2003. a review of the child allowance system is ongoing. as part of that REVIEW IT has been agreed that the development of a comprehensive means testing system should be examined with the aim of covering all forms of social payments and assistance. SINCE the review is NOT YET COMPLETE it is considered INappropriate for an increase to be applied in isolation.
12.9 FINALLY, following the consideration of options on the future of THE HOLIDAY credit scheme, it is proposed that the accrual of credits should cease from 1 july this year BUT that the scheme should remain open for 3 years FOR ACCESS TO CREDITS ALREADY ACCRUED. iF THE PROPOSAL IS APPROVED this means THAT any credits unused at 30 JUNE 2011 would be forfeit. iT SHOULD BE NOTED THAT THE PUBLIC ACCOUNTS FOR THE YEAR ENDED 30 jUNE 2007 SHOWS A BALANCE OF £1.37 MILLION OF ACCRUED CREDITS DUE TO ENTITLED RESIDENTS.
13. IN MY LAST BUDGET PRESENTATION I AM PLEASED THAT A SURPLUS HAS BEEN PRODUCED. ALTHOUGH THE LEVELLING OUT OF FISHING LICENCE FEE INCOME CONTINUES TO CHALLENGE THE PROCESS, OTHER SOURCES OF REVENUE FROM THE OVERSEAS INVESTMENT OF OUR RESERVE FUNDS AND FROM OUR MATURING ECONOMY HAVE HELPED TO EASE THE SITUATION. NECESSARY AND MEASURED ADJUSTMENTS TO CHARGES AND EXPENDITURE PLANS HAVE ALSO HELPED TO ENSURE THAT GOVERNMENT REMAINS IN THE BLACK.
14. THIS IS NOT DOWN TO ME OF COURSE BUT TO THE WHOLE MACHINERY OF GOVERNMENT WORKING TOGETHER FOR THE BENEFIT OF OUR COUNTRY. AFTER 18 YEARS OF LEADING THE BEAN COUNTING AND BOOK COOKING THE BUDGETS HAVEN’T GOT ANY EASIER. THIS ONE WAS PARTICULARLY CHALLENGING SO WELL DONE TO CLAUDETTEE FOR PLANNING BUDGET DAY TO COINCIDE WITH CHALLENGE DAY. OR DID STEVE DENT HAVE A PREMONITION THAT THIS YEAR’S BUDGET WOULD BE TOUGHER THAN MOST. IN ANY EVENT I’LL GET MY OWN BACK TONIGHT AT THE LEISURE CENTRE WHERE I’M RUNNING SOME ENERGETIC DANCES FOR THOSE WHO ARE LOOKING FOR A DIFFERENT SORT OF CHALLENGE.
15. IT IS CLEAR FROM THE ALMOST STATIC STATE OF PROJECTED REVENUES AND THEIR VOLATILE NATURE ON THE ONE HAND, COMBINED WITH COST PRESSURES AND ASPIRATIONS TO FINANCE ON THE OTHER HAND, THAT FUTURE BUDGETS ARE GOING TO REMAIN CHALLENGING. IN DEVELOPING A MEDIUM TERM FINANCIAL PLAN TO COPE WITH THESE CHALLENGES TOUGH DECISIONS AND CHOICES BETWEEN REDUCING SERVICE LEVELS OR INCREASING CHARGES AND TAXES IN SOME AREAS WILL NEED TO BE MADE. BUT WE ARE APPROACHING THIS CHALLENGING ENVIRONMENT FROM A HEALTHY FINANCIAL POSITION AND FROM A STRONG RESOURCE BASE. IT IS NOT ALL DOOM AND GLOOM. FOR INSTANCE, ALTHOUGH THE UPWARD MOVEMENT IN OUR BALANCES HAS SLOWED DOWN RECENTLY, OVER THE PAST 17 YEARS THE CONSOLIDATED FUND, WHICH IS OUR MAIN RESERVE FUND, HAS GAINED REAL VALUE BY GOING UP FROM £36.8 TO £93.6 MILLION, THAT IS BY 154%. DURING THE SAME PERIOD THE LOCAL RETAIL PRICES INDEX ROSE BY 66%. OVER THE NEXT 5 YEARS IT IS PROJECTED THAT THE CONSOLIDATED FUND WILL MAINTAIN ITS VALUE IN REAL TERMS AND BY 30 JUNE 2013 WILL REPRESENT A MULTIPLE OF 3 TIMES OPERATING EXPENDITURE, AN IMPROVEMENT OVER THE CURRENT 2.6 TIMES. HOWEVER, SUCH IMPROVEMENT WILL ONLY BE REALISED IF OUR FINANCIAL PLANS AND BUDGET STRATEGIES ARE FOLLOWED AND WE CONTINUE TO LIVE WITHIN OUR MEANS.
16. THE PRODUCTION OF A BUDGET IS A TEAM EFFORT AND I WOULD LIKE TO THANK HEADS OF DEPARTMENTS, ACCOUNTING OFFICERS AND SUPPORT STAFF FOR ALL THEIR HARD WORK. I MUST ALSO PAY TRIBUTE TO HONOURABLE MEMBERS WHO HAVE HAD TO DEVOTE MORE TIME THAN USUAL TO THE PROCESS. IT’S BAD ENOUGH HAVING TO WRITE OR REVIEW THE PAPERS LET ALONE READ THEM. THANKS MUST ALSO GO TO MY COLLEAGUE ON MY LEFT, THE CHIEF EXECUTIVE, FOR HIS ENTHUSIASTIC LEADERSHIP IN DRIVING FORWARD THE DEVELOPMENT OF THE MEDIUM TERM FINANCIAL PLAN AND FOR HIS CONTRIBUTION TO THE REST OF THE BUDGET PROCESS. AS EVER I RELIED VERY HEAVILY ON TREASURY STAFF IN PULLING THE WHOLE THING TOGETHER. IN PARTICULAR I MUST THANK KEITH PADGETT, OUR FINANCIAL SECRETARY DESIGNATE, WHO IS CURRENTLY OVERSEAS ACCOMPANYING HIS WIFE, VAL, ON MEDICAL TREATMENT, BUT WHO IS ABLE TO WORK REMOTELY IN HIS USUAL EFFICIENT STYLE. IN FACT HE HAS HAD SEVERAL LONG DAYS IN FRONT OF HIS COMPUTER PUTTING THE FINAL TOUCHES TO PAPERS AND THE PROCESS IS NOT QUITE OVER YET. I AM EQUALLY INDEBTED TO NICOLA GRANGER, OUR ACCOUNTANT, WHO FORTUNATELY TOOK OVER THE NUMBER CRUNCHING FROM KEITH AT THE OUTSET OF THIS, HER FIRST BUDGET SESSION, AND WHO KEEPS TRACK OF ALL THE ADJUSTMENTS IN HER WELL CONSTRUCTED SPREADSHEETS. I WOULD ALSO LIKE TO THANK MARGARET BUTLER FOR HER ASSISTANCE IN PROVIDING SECRETARIAL SUPPORT. MARGARET HAS ONLY RECENTLY TAKEN OVER THE REIGNS AS MY PA AND IS WORKING AT HER FIRST BUDGET SESSION ALSO.
17. MR SPEAKER, THIS CONCLUDES MY LAST BUDGET PRESENTATION TO THIS HOUSE AND I BEG TO MOVE THE FIRST READING OF THE BILL.
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