MANX BUDGET: FISCAL HOUDINI PROMISES MUCH BUT DELIVERS LITTLE

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NEWS FROM THE CELTIC LEAGUE

MANX BUDGET: FISCAL HOUDINI PROMISES MUCH BUT DELIVERS LITTLE

Sections of Manx society needed relief today not jam tomorrow!

Like some fiscal ‘Houdini’ the Treasury Minister, Eddie Teare, MHK, has promised much but delivered little in his 2015 budget.
It appears that the books of ‘the Manx State ’ will be balanced but they will be balanced on the backs of the poorest in Manx society who will continue to suffer for a further twelve months at least.

Thereafter, and conveniently in election year, a new tax strategy will be unveiled which will, we are told, lift around a quarter of the population out of tax. The plan envisages a £14000 tax threshold and abolishes the 10% rate of tax replacing this with a standard 20% rate across the board.

It has been described by Mr Teare 'one of the most adventurous for many years' but will be subject to consultation and dependant on Tynwald acceptance of today's Budget in its entirety. Why exactly this last caveat was needed is anyone’s guess as Tynwald en masse (with one or two exceptions) has ‘nodded’ through every budget for the past two decades.

‘Adventurous’ it may be but those 25% of the Manx population who on the governments own figures are struggling to get by were looking less for ‘adventure’ and more for practical relief today rather than jam tomorrow.

In addition as Tynwald ruminate over Eddie’s ‘adventure’ they may wish to weigh up just exactly where the new plan will take us. Certainly a welcome boost for those on extremely low incomes but the offset ‘may’ fall on those on low middle incomes including pensioners with comparatively modest occupational pensions. So the message may be ‘work all your life, put money into a pension pot and we’ll sting you’!

The plan may in the short term rescue the very poorest by creating a new low income group. A graduated tax plan may have been a better option – but of course that’s not on the table because it would impact those best able to pay on upper medium and high incomes.

The budget performance today went of with all the skill of the great illusionist. More help for carers (no doubt greatly needed) was offset by pensioners who choose to work on after 65 being drawn back into the National Insurance net – what will they get for that? Increased benefits later on? Perhaps if they live to draw them!

All this financial ‘jiggery-pokery’ is set against the backdrop of a government that can still fund handouts to sections of society whose need is hardly as great as those let down by the government today!

As if to emphasise the unfairness Celtic League received a reply today to our query to the Chief Minister (CM) about fiscal transparency (received via Minister for Agriculture Richard Ronan, MHK, – possibly due to the CMs current illness). It confirms that substantial government sums are going to businesses and individuals but does not contain the detail we sought to elicit (a full update will be posted on CL News in due course).

A major feature of the Treasury Ministers build-up to the budget and his presentation today involved reference to the budget having been ‘rebalanced’ with reserves now apparently secure, again this may be illusory. It would be a foolish person indeed who believes that the IOM is out of the woods fiscally and those reserves we would conjecture could diminish further in the next few years.

The aftermath then of budget day 2015 will still see the governments ‘fiscal vice’ tightening around the throat of the working poor but never mind they can dream about that ‘jam tomorrow’!

J B Moffatt (Mr)
Director of Information

17/02/15

(Please note that replies to correspondence received by the League and posted on CL News are usually scanned hard copies. Obviously every effort is made to ensure the scanning process is accurate but sometimes errors do occur.)

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