Chief Minister Writes On Fiscal Challenges Facing Manx Nation

[P.K.]

I just wonder about so called 'leaders' who have only really reacted at all since a 25% cut has been imposed on them by the UK ending its VAT subsidy. They clearly could not see an express train bearing down on them in the economic climate of the last 18 months+.

Neither did you though.

I wasn't aware it was manshimajin's lot in life to forecast the financial shortfalls the IOM might face and then to plan accordingly.

 

It is, however, exactly what Tynpotwald should have been doing. It's what they are overpaid for...

[manshimajin]

I just wonder about so called 'leaders' who have only really reacted at all since a 25% cut has been imposed on them by the UK ending its VAT subsidy. They clearly could not see an express train bearing down on them in the economic climate of the last 18 months+.

Neither did you though.

Read back Triskelion, read back...

[Tugger]

It's healthy and necessary to trim the fat, essential to make the rest all lean, but the loss of 25% of income is going to inevitably dig into a lot of flesh.

 

Personally I can't see them doing all this without having to bring in some, albeit maybe a limited, form of Corporation Tax or other taxes. I think there may a couple of surprise announcements in the next budget statement - surely there has to be?

 

The introduction of corporation tax would reduce the Isle of Man's tax take considerably, and Malcolm Couch knows it

[Topaz]

Just finished reading Mr. Brown's fiscal statement.

 

 

 

[manshimajin]

Just finished reading Mr. Brown's fiscal statement.

Apparently they thought they were getting Alistair Campbell to spin write it but were given Alistair Dumbell instead. As the old phrase goes "it says nothing well".

 

Triskelion - I must apologise you are quite correct that I did not see the VAT reduction coming - but funnily enough I was not privy to any information on how our VAT receipts matched the VAT paid to us by the UK...I suspect that the Treasurer should have been and that if he chose to ignore the likely loss of a 25% subsidy when the UK was strapped for money and there was an anti-tax fugitives mood in the air he was stupid.

 

All I was foreseeing was that the IoM would not be immune from global trends and the Governmet ought to have been acting as soon as possible to tighten belts not to keep shoving out money on over-priced and ill though through projects.

 

Mind you Blind Freddy and his dog could have seen that.

[Albert Tatlock]

It's healthy and necessary to trim the fat, essential to make the rest all lean, but the loss of 25% of income is going to inevitably dig into a lot of flesh.

 

Personally I can't see them doing all this without having to bring in some, albeit maybe a limited, form of Corporation Tax or other taxes. I think there may a couple of surprise announcements in the next budget statement - surely there has to be?

 

The introduction of corporation tax would reduce the Isle of Man's tax take considerably, and Malcolm Couch knows it

The introduction of corporation tax at UK levels of 28% most definitely would. Not that I'm advocating CT, but care to explain exactly what your reasoning is on that in terms of figures/Data to back that assertion - if, say, it were to be brought in at a 5% or 10% level for e.g. some types of businesses? Or is this more about a general fear businesses/individuals would leave?

[Tugger]

CSPs on the island employ large numbers of people. Many of the companies incorporated here are simple asset holding vehicles, e.g.for UK real estate. They will ALL redomicile to the British Virgin Islands, and the Equioms, Bostons, Abacuses and their like will shed staff. The fact is that most companies incorporated on the Isle of Man reqally have little economic connection with the place.

[triskelion]

I wasn't aware it was manshimajin's lot in life to forecast the financial shortfalls the IOM might face and then to plan accordingly.

 

It is, however, exactly what Tynpotwald should have been doing. It's what they are overpaid for...

No it isn't.

 

Triskelion - I must apologise you are quite correct that I did not see the VAT reduction coming - but funnily enough I was not privy to any information on how our VAT receipts matched the VAT paid to us by the UK...I suspect that the Treasurer should have been and that if he chose to ignore the likely loss of a 25% subsidy when the UK was strapped for money and there was an anti-tax fugitives mood in the air he was stupid.

Well he almost certainly was, but so what? Any moves to broaden the tax base or "pro-actively" slash spending would essentially have been both an admission of guilt and have led to considerable confusion and rows - witness the vitirol that greets any suggestion of setting more realistic tax rates. The budget clearly shows that except for the benefits section of the DHSS, departments had had their budgets cuts even before the VAT rate reduction.

[P.K.]

I wasn't aware it was manshimajin's lot in life to forecast the financial shortfalls the IOM might face and then to plan accordingly.

 

It is, however, exactly what Tynpotwald should have been doing. It's what they are overpaid for...

No it isn't.

So they're not there to govern and manage the island's finances in a prudent way then?

 

Well, you've got that one 100% right...

 

Dick.

[Boo Gay'n]

Tynwald votes for rise in NI to boost health service

Published Date:

19 November 2009

http://www.iomtoday.co.im/news/Tynwald-vot...e-in.5840995.jp

Wait 'til Tynwald realises what they voted for! It will be the same as the UK 10% tax rate debacle all over again.

[censorship]

Dick.

 

You can always rely on good old PK to deliver a pithy, observant and well-argued point with plenty of relevant evidence. What's that? He always runs out of intelligence and wit after a couple of posts and resorts to base insults? My mistake.

[manshimajin]

Triskelion - I must apologise you are quite correct that I did not see the VAT reduction coming - but funnily enough I was not privy to any information on how our VAT receipts matched the VAT paid to us by the UK...I suspect that the Treasurer should have been and that if he chose to ignore the likely loss of a 25% subsidy when the UK was strapped for money and there was an anti-tax fugitives mood in the air he was stupid.

Well he almost certainly was, but so what? Any moves to broaden the tax base or "pro-actively" slash spending would essentially have been both an admission of guilt and have led to considerable confusion and rows - witness the vitirol that greets any suggestion of setting more realistic tax rates. The budget clearly shows that except for the benefits section of the DHSS, departments had had their budgets cuts even before the VAT rate reduction.

If I am reading the figures in the "Pink Book" correctly the main reason that budgets were cut back was a reduction in the interest rate payable on loans from 6.25% to 3.25%. Discounting the reductions due to these changes most departments had increased budgets the exceptions being - LGE, DoTL, Treasury, Comms Commission and FSA - i.e. 12 out of 17 got the same or an increased operational budget and overall there was an underlying operational budget increase of 3.96%. It looks like it was thanks primarily to lower interest rates that the actual expenditure increase was limited to 1% - not to tough expense cutting action by the Treasurer. The last budget does not appear to have produced smaller government.

 

Assuming about a £90 million loss in VAT receipts (I note thet TB's epistle is silent on the amounts involved - don't want to scare the sheep) there will be a 15% reduction in overall revenue collection on a 'same as last year' basis. I agree with you that something needs to be done about taxation right across the board but this must be coupled with real reductions in the size of government. Obviously what needs to happen on revenue depends on what can be saved on expenses.

[Albert Tatlock]

Assuming about a £90 million loss in VAT receipts (I note thet TB's epistle is silent on the amounts involved - don't want to scare the sheep) there will be a 15% reduction in overall revenue collection on a 'same as last year' basis. I agree with you that something needs to be done about taxation right across the board but this must be coupled with real reductions in the size of government. Obviously what needs to happen on revenue depends on what can be saved on expenses.

Brown can only focus on one thing at a time, and that's the Bowl for now. Funny how he can seem to find a few £million for that, but the Department of Health is in such a shocking state they had to up NI to raise £9M, and we're constantly hearing stories that we might be losing staff in education as 'cuts can't be ruled out'. Still, what's a few unemployed people on the island compared to a stadium built for a one off event, which we don't really need at this time when there are plenty of other venues around the island that could hold the same events.

 

I hope they rename the Bowl 'Brown's folly'. As a taxpayer, I feel even more scammed than usual with what's going on at the moment.

 

Brown should be leading the way in how we can actually 'make do' with what facilities we already have on this one IMO. 'Make do', is going to be a common phrase given a loss of 25% of govt income.

 

But of course that all depends on what Allan Bell is going to 'pull out of the hat' at the forthcoming budget - so IMO, they're either being particularly savvy about what is going to happen in that budget, or, are being particularly stupid wasting money on the likes of the Bowl when people are clearly going to suffer if that 25% loss of income remains the case. I suspect the latter at the moment, and on his next trip to England, fully expect Brown to come back with some 'magic' beans.

[asitis]

Tony Brown is not I am afraid up to the job, even of being a figurehead for the island to sort this mess. However that is not only true of him but relates to a large number of other members as well. The island is no longer a small parish in isolation and town councillors mentality is not sufficient when playing with the big boys. Roll on the next election and a hope for some decent candidates !!

[P.K.]

Brown can only focus on one thing at a time, and that's the Bowl for now. Funny how he can seem to find a few £million for that, but the Department of Health is in such a shocking state they had to up NI to raise £9M, and we're constantly hearing stories that we might be losing staff in education as 'cuts can't be ruled out'. Still, what's a few unemployed people on the island compared to a stadium built for a one off event, which we don't really need at this time when there are plenty of other venues around the island that could hold the same events.

I think calling it a "shocking state" is a little harsh. Their budget was out by only about 3.5%. That's not bad when you think just the weather can drastically alter how much healthcare is required.