Many of us have concerns, perhaps fears, about how we are going to pay back the money spent by our government during the Covid pandemic.
Many hundreds of millions have been paid out to businesses and individuals to help cushion them against financial loss, while the Island has been virtually closed to visitors in repeated lockdowns.
Government has also recently borrowed a further £400 million to restructure debt for the Manx Utilities Authority and the Steam Packet. It is possible that further support for businesses will be required over the next 12 months, as we prepare for what we all hope will be a more normal summer in 2022; with the return of the TT and regular visitors from the UK and the wider world.
We have been able to finance this and take out loans because the Island is fortunate in having around £2 billion in its financial reserves, giving lenders and other jurisdictions confidence in our financial stability. However, these reserves are there to make sure that we can meet our long term commitments on pensions etc, and also meet the challenge of future emergencies.
Although the current financial year and probably 2022/23 are not the time we should be contemplating raising government revenue or indeed significantly reducing expenditure, the next administration will need to address this in future years. Hopefully the economy will be resilient and grow, but if we are to see improvements in health and social care and invest in measures to help people reduce reliance on fossil fuels, then somehow we’ll have to pay for that.
No-one wants to see taxes rise, either directly or by ‘stealth’. Any that may be necessary must be seen to be fair and increased gradually. Consideration should be given to a small increase in National Insurance, with an end to the cap at £3,500 per month and an end to people who choose to continue working past retirement age being exempt. The tax cap should also be reviewed and we should consider scrapping the annual vehicle road fund tax and raising this money instead from increased duty on petrol and diesel.
Any organisation can always find ways of doing things more efficiently, and the Isle of Man Government is no exception. A department by department review is essential, with the Department of Infrastructure perhaps top of the list. However, we all value our public services. Hospitals, schools, emergency services, our culture and heritage all rely on the taxes we pay. They are our services and we must ensure that they are run to meet our needs.