Jersey’s government is planning to borrow more than a third of a billion pounds in 2021 to try and balance the books.
The intention to take out the £336 million loan is confirmed in the newly published Government Plan for 2021 to 2024.
The borrowing is in addition to the £50 million set aside in the Fiscal Stimulus Fund and represents the biggest single package of public sector debt in the island’s history.
Protecting all Islanders, especially those at highest risk from the effects of Covid-19, will remain our priority as we continue to react to the medical and healthcare challenges presented by the pandemic. This includes ensuring the wellbeing of our Island’s children; protecting our elderly citizens and those who feel isolated by the pandemic; and supporting those whose livelihoods are threatened.
He also confirmed extra spending for the temporary Nightingale Hospital, for PPE equipment for health and care workers, and for a Covid-19 vaccine when one becomes available.
The Treasury Minister, Deputy Susie Pinel, today confirmed the government will be operating at a loss for the next few years.
This Government Plan includes a strategy of running deficits to support spending and investment in the coming years, with a return to balanced budgets by 2024. It is a plan that gives Jersey a consistent long-term framework for both economic and fiscal policy with the capacity to respond, in the short-term, to Covid-19 pressures.
Jersey’s medicinal cannabis growers will be taxed under new plans to boost the government’s finances.
Existing plans to slash £100 million of costs from government by 2024 will now be increased by an additional £20 million.
Latest financial projections show the amount of money raised by government through income tax is likely to be a quarter of a billion smaller than predicted before the coronavirus pandemic.
Alcohol duties will remain frozen, but it is planned to increase duty on cigarettes by 5.5% and hand-rolling tobacco and cigars by 8.5% from 2021, with an additional 2.3p a litre added to fuel.
Tax allowances will remain broadly static, with the single person’s allowance rising from £15,900 to £16,000 and the couple’s allowance rising from £25,550 to £25,700.
In addition to previously announced spending, there’ll be £42million spent on improving schools, £28million on reforming healthcare, and £6 million for child and adolescent mental health from 2021 to 2024.
It has also been confirmed the predicted spend on managing the pandemic in 2021 will be more than £100 million.
Also revealed in the Government Plan is confirmation the decision on where to base the government’s headquarters, currently a temporary base at Broad Street, will be announced before the end of October.
The Chief Minister, Senator John Le Fondré, previously indicated to ITV News the International Finance Centre was one location under consideration.