Teare's budget aims to rebalance nation's finances

The Treasury Minister Eddie Teare has told Tynwald the budget he delivers today aims to reduce government spending without stifling growth, to rebalance public finances by 2015 -16.

His 2013 - 14 budget is the second step in a four year rebalancing plan following the loss of almost one third of government's annual income as a result of the re-drawn VAT agreement.

Mr Teare told Tynwald court he is delivering on a promise made last year to do that in the time scale, through a mix of public spending reductions, efficiency savings across government and the use of reserves, £31 million in the coming year.

At the start of his speech Mr Teare said government priorities to reduce overall spending, grow the economy and protect the most vulnerable, were threads running through his budget.

He warned those clear priorities meant spending on services he described as nice to have but not vital, would be questioned. He acknowledged reducing services would provoke criticism but said firm decisions and actions are required for the Island to deal with current 'unprecedented pressures'.

The minister pointed to recent achievements including the success of business sectors such as the aircraft and ship registries, manufacturing and ICT and the reduction in the size of the civil service, with 300 staff and 400 posts shed since 2010.

He said the Island had performed well economically in the face of continued worldwide slowdown. Unemployment remains steady at 2.6% compared to the OECD average of 8% and the Manx economy, growing at an estimated 3% in real terms, had out-performed the OECD where national income in 2012 grew by less than half that figure.

Mr Teare referred to the Scope of Government report when he warned every area of public spending will continue to be examined closely: