Falklands : The Hon Mr Mike Summers MLA Speaks to the Finance Bill 2012/13
Submitted by Falkland Islands News Network (Juanita Brock) 02.06.2012 (Article Archived on 16.06.2012)
Mr Speaker, Honourable Members, it’s my 14th Annual Budget and none of them has ever been easy. This one perhaps was only slightly easier than some of those in the last six to eight years where we started off with potential deficits of three, four or five Million (Pounds) and had to work out how to cut expenditure because income was not rising.
The Hon Mr Mike Summers MLA
Mr Speaker, Honourable Members, it’s my 14th Annual Budget and none of them has ever been easy. This one perhaps was only slightly easier than some of those in the last six to eight years where we started off with potential deficits of three, four or five Million (Pounds) and had to work out how to cut expenditure because income was not rising.
The recent influx of a bit of windfall income has been very welcome but it does slightly mask our position of rising expenditure, which will only ever continue to rise. And it is a very, very difficult process and we therefore have to be cautious about the rate at which we allow expenditure to rise year on year.
I spent quite a lot (of time) in the meetings we had about the Medium Term Financial Plan and my belief that we need to set a target that is more ambitious than to break even. The value of our reserves stands somewhere over £100 Million and just the rate of inflation will decrease those reserves over time unless we continue to make contributions to them. We can rely to some extent on windfall incomes but it’s not very safe.
And so we have to keep contributing to the reserves in exactly the same way that I think we will need to keep contributing to pension funds. While the Old Scheme fund might last as it is, certainly the existing retirement pension fund is going to be a cause for very substantial concern as we go forward. And I think fairly radical measures are going to be required to deal with that and the Old Scheme – sorry – with the pension fund.
I am happy that Members finally agreed to increase the thresholds of taxation. I think it is important but it is only a package of measures to try and help those people at the lower ends of the pay scale and, as my Honourable Colleague Jan Cheek, has mentioned, it won’t help those people who are already underneath the tax threshold. But nevertheless it is an important contribution both to young families and to older people who are not in the upper ends of the pay scales. I am very disappointed that I was not able to convince enough colleagues that we should change the MST arrangements but we will have a look at that going forward and I think at the very least we need to make payment of Personal MST subject to POAT regulations because it simply isn’t fair – it isn’t reasonable in any tax regime to be taxing people who fall below the relevant tax thresholds.
And the rest of the packages – the targeting - are important – housing, again, at the lower end of the scale is becoming an important issue. It was at my suggestion that we said that we would take another look at how we keep increasing prices for housing at the lower end of the scale. I don’t think just following the private is necessarily the right thing to do. And as part of that I hope we will look at the possibility of including rent rebates for people in private sector housing. It’s only currently available for people in public sector housing and in the YMCA. And if we have a policy to encourage people to build their own houses or to rent in the Private Sector then the availability of rent rebate in the private sector needs to be looked at but it will be complicated.
Certainly fuel and electricity are going to be a big issue.
There is a lot in the budget that’s very positive. We have a Capital Programme of £9.9 Million. That is hugely ambitious; I think it’s a long time since we spent that much Capital in a financial year. And I rather doubt that we will manage it again but it does depend on one or two big projects.
But a Capital Programme drives growth in the country and we do need to see what the growth figures have been over the last three to four years and I do urge the public sector to get those GDP figures out for us so we can make assessments to the effect that our investments in various industries are having. And the investment in growth is very welcomed. The additional contribution to tourism which is projected to improve the income for tourism is very welcome, as is the contributions in Agriculture and to the Rural Development Strategy.
I think overall, Mr Speaker, it’s a budget that is adequate but probably won’t be terribly happily received amongst the members of the public because there are so many increases in expenses without necessarily the equivalent amount of return to pay for them.
We will see where we get to it but I support the Motion.
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