The Chief Minister presented to Montserrat his budget statement yesterday and we published on our website www.themontserratreporter.com some thoughts as to what one would have expected to be included in the budget in view of what came out of the UK budget presented on Wednesday.
Some highlights from the UK Budget as presented, can be found at: http://www.bbc.co.uk/news/uk-politics-12829433
Notice that the UK budget includes fiscal measures designed to help individuals and companies. The tax threshold is being raised and the company tax is being lowered. Tax on fuel is being lowered ever so slightly so that people get an ease at the pump. Nothing like that happened in this budget with fuel prices rising almost weekly.
Did we expect any such measures in Montserrat’s budget on Thursday? Or was it be just another disjointed speech day exercise to fulfill a procedural requirement? Some people were impressed with its delivery.
For example the old UK Corporation tax of 28% is being reduced to 26% in this budget; and UK Gov is targetting a maximum rate of 23% for Corporation Tax by 2014. What is Montserrat’s Corporate tax rate 30%+?
The tax regime will see Modernization and Simplification, but this is being designed to bring more revenue and will perhaps be less burdensome to the less financially privileged.
Note also that the UK Government is freezing their Council Tax. The Councils need more money to operate, but the Coalition Government is not allowing them to raise the local taxes; instead they are being topped up from Central Government borrowing.
http://news.uk.msn.com/uk/articles.aspx?cp-documentid=156635276
Local government is “committed to reforming the tax system.” The benefit: “to strengthen the arrangements for tax collection, integrate tax planning, and encourage a strategic and coordinated approach to taxation policy and maximize its use as a development tool.”
We are still wasting time with tax arrears, but maybe it is worth the while. Will we be able to do better with $22 million outstanding from 1967, having collected $1 million by January this year? Who are the ones owing this sum? Time to get positive!
A new banded system of taxation is proposed whereby the poorest pay less tax, but all this when there are no efforts to improve one’s livelihood will mean naught and is just designed to mislead.
This, notwithstanding the CM says: “This government will leave behind a simpler, fairer, more coordinated and transparent tax system. It will also leave a more efficient system that aids development planning.”
“Live within your means,” we were told; and sage advice that is of course. This is how the Mother Bird lives within its means;
“Forecast borrowing of £146bn this year, £2.5bn lower than anticipated. Borrowing to fall to £122bn next year, dropping to £29bn by 2015-16
National debt forecast to be 60% of national income this year, rising to 71% in 2012 before falling to 69% by 2015″
Bottom line is that the UK Government understands that even while tightening the belt, there are a number of things that must be done in order to encourage economic growth.
What are we doing (What are we allowed to do?) to foster growth and stability in Montserrat?
Meanwhile we must pay attention to the plans the FCO are working on for us; and note their stated commitments.
See The Secretary of State for Foreign and Commonwealth written statement at the link below.
www.publications.parliament.uk/pa/cm201011/cmhansrd/cm110310/wmstext/110310m0001.htm.
Hague says inter alia; …”Our overall vision is for our territories to be vibrant and flourishing communities, proudly retaining aspects of their British identity and generating wider opportunities for their people. We want to cherish the rich environmental assets for which, together, we are responsible.”
“I also plan to bring all aspects of the Government’s policies on the overseas territories together in a new White Paper in the course of the year ahead. We will want to consult widely on this. I am working with relevant Departments on a new strategy to underpin this Government’s approach to the territories…”
So do we know what WE want the relationship to be like?
Are we going to make submissions for a more mature partnership (or integration) (or independence); or are we happy with the Bird and Chick type of relationship that the DfID Secretary of State seems to think we have?
