Government Finance - Stormy Weather Ahead !

Saturday, 05 December 2009 18:10 Chris Blyth
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The latest news from the UK Treasury is that UK tax revenues have fallen significantly this year (down 12.9%) - due, in particular, to

These are necessary and easily anticipated adjustments given the current stage of the UK economic cycle, and the fall-out from the "credit crunch" - but there are obvious repurcussions on the Isle of Man, with the fall in overall VAT revenue presumably causing a reduction in any payout under the sharing arrangement with UK (and not just from the cut to 15% rather than17.5%).

Has that been officially recognised or acknowledged by the Manx Treasury as yet ?  And what are the Treasury's projections for both revenue and expenditure for this financial year ?  And if there is a forecast shortfall in revenue, what measures are the Government proposing to ensure a balanced year-end outcome ?

And again, given the cut in the VAT sharing arrangements which start to impact upon the Manx economy in 2010/11, just how does the Manx Government justify the belief that the local economy will continue to grow at the 7.5% explicit in its future public sector pension arrangements ?  When even the optimistic Mr Darling is only hoping for 1.5% UK economic growth (from the low point of 2009).

So ..... lots of questions to be answered in coming months, with a public sector hoping to avoid cut-backs and redundancy programmes, a private sector hoping to avoid tax increases, and a Finance Minister stuck in the middle, trying to square the circle......  we live in interesting times indeed !