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Proposed Government Plan 2021-24

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Proposed Government Plan 2021-24 1 1 Our purpose Our purpose as the Government of Jersey is to serve and represent the best interests of the Island and its citizens: In order to do this, we must: • Provide strong, fair and trusted leadership for the Island and its people • Deliver positive, sustainable, economic, social and environmental outcomes for Jersey • Ensure effective, efficient and sustainable management of public funds • Ensure the provision of modern and highly-valued services for the public. How to use the Government Plan 2021-2024 Part One sets out the approach the Government of Jersey has taken in this Government Plan to protect the Island’s future. This includes how we will continue to respond to Covid-19, including through heath, social and economic recovery and fiscal stimulus, how we will continue to invest in the Common Strategic Policy priorities, how we have listened to Islanders and how we have taken into account sustainable public finances and sustainable wellbeing, as required by the Public Finances (Jersey) Law 2019. Parts Two and Three outline how the Government will invest in the five strategic priorities, while continuing to respond to the challenges of the global pandemic. At the same time, how we will continue our progress on modernising and driving efficiency across the Government. Part Four sets out how the Government will make sure that expenditure is sustainable, using borrowing to support it, and enabling a plan to be delivered to balance the budget in the medium-term, continuing to invest in strategic priorities and preserving our reserves for any potential future shocks to our economy. 3 Contents Chief Minister’s foreword 8 Minister for Treasury and Resources foreword 12 1 Introduction 14 Government Priorities 34 We will put children first 38 We will improve Islanders wellbeing and mental and physical 46 health We will create a sustainable, vibrant economy and skilled local 58 2 workforce for the future We will reduce income inequality and improve the standard of 68 living We will protect and value our environment 74 Modernising Government 82 Our investment 87 Non-Ministerial investment 92 3 Rebalancing Government finances 94 4 Government Finances 102 Finances at a glance 104 Budget measures for 2021 106 Summary of finances 108 Financial and economic context 111 4 Financial Strategy 117 Guiding Principles 123 Public sector spending 2021-24 125 Capital 2021-24 132 General Revenue Income 145 Budget proposals 151 Progress of tax reviews 157 Government of Jersey Balance Sheet and States funds 161 Key fiscal measures for consideration in 2021 175 Appendices 180 Appendix 1: Key to abbreviations 182 Appendix 2: Summary tables 184 Appendix 3: New revenue initiatives 190 Appendix 4: Revenue expenditure initiatives in last year’s 192 Government Plan Appendix 5: Administrative tax measures 200 Appendix 6: Managing risk 202 5 Council of Ministers Senator John Le Senator Lyndon Senator Ian Gorst Fondré Farnham Minister for External Relations Deputy Chief Minister Chief Minister Minister for Economic Development, Tourism, Sport and Culture Deputy Carolyn Labey Deputy Kevin Lewis Deputy Judy Martin Minister for International Minister for Infrastructure Minister for Social Security Development Senator Sam Mézec Connétable Len Norman Deputy Susie Pinel Minister for Children Minister for Home Affairs Minister for Treasury and Housing and Resources Deputy Richard Renouf Senator Tracey Deputy John Young Vallois Minister for Health Minister for and Social Services Minister for Education the Environment 6 Assistant Ministers Connétable Deputy Deputy Richard Buchanan Rowland Huelin Scott Wickenden Assistant Chief Minister, Assistant Chief Assistant Chief Assistant Minister for Minister Minister, Assistant External Relations Minister for Social Security Deputy Deputy Deputy Lindsay Ash Gregory Guida Montfort Tadier Assistant Minister Assistant Minister Assistant Minister for Treasury and for the Environment, for Economic Resources Assistant Minister Development, Tourism, Assistant Minister for for Home Affairs Sport and Culture Home Affairs Assistant Minister for Environment Senator Deputy Deputy Steve Pallett Hugh Raymond Jeremy Maҫon Assistant Minister for Assistant Minister Assistant Minister for Economic Development, for Health and Social Education, Assistant Tourism, Sport and Culture Services, Minister for Health Assistant Minister for Assistant Minister for and Social Services Health and Social Infrastructure Assistant Minister Services for Social Security Assistant Minister for Children and Housing 7 Our ambition Chief Minister foreword When we introduced the first Government Plan in November 2019, nobody could have predicted the unprecedented impact that the global Covid-19 pandemic would have on our lives, on our Senator John Le Fondré community and on our economy. Chief Minister It has meant a substantial disruption to the work of Government, impacting on our income and creating a significant increase in our expenditure, as we moved quickly and effectively to meet the health, economic and fiscal challenges presented by the pandemic. It forced us to re-examine the delivery of some projects, to re-prioritise how we use our resources, and to re-think how we continue to invest in our Island. Covid-19 has not altered the determination and commitment of the Council of Ministers to improve Islanders’ lives through the pledges we set out in the Common Strategic Policy. It has also not changed my determination that we will do what is needed to provide a sustainable and long-term legacy for Jersey. Nonetheless there is no doubt that since March 2020, dealing with the pandemic has been the priority, and I am proud of the way that the Government has responded. Led always by expert medical advice, we took the steps necessary to protect our community. We shielded the most vulnerable, built the Nightingale Wing, integrated the healthcare system with GPs, established an ethical care framework, set up the Personal Protective Equipment (PPE) hub and ran the largest public health awareness campaign ever seen in the Island. Subsequently, we developed a testing programme which ranks amongst the most effective in Europe and implemented a comprehensive track and trace program to mitigate the spread of the virus within our community, whilst safely opening our borders. We have also sought to protect the economic future of the Island. Our initial measures to assist local businesses were announced within 24 hours of Covid-19 being categorised as a pandemic by the World Health Organisation. This included the deferral of GST payments, the deferral of Social Security contributions and, in many cases, the deferral of rent payments for properties where the government acts as landlord. Shortly thereafter, on 18th March, we announced a multi-million pound package support for local businesses ranging from the loan guarantee scheme to the Co-Funded Payroll Scheme. 8 Our ambition I believe we have responded well to the impact of Covid-19, and we remain prepared for the effects of a second wave of the virus, should one emerge this winter. The measures set out in this Government Plan represent the continued ambitions of the Council of Ministers to meet our responsibility to protect Islanders from the pandemic, while ensuing our overarching aims and objectives in the Common Strategic Policy continue to be put first. Protecting all Islanders, especially those at highest risk from the effects of Covid-19, will remain our priority as we continue to react to the medical and healthcare challenges presented by the pandemic. This includes ensuring the wellbeing of our Island’s children; protecting our elderly citizens and those who feel isolated by the pandemic; and supporting those whose livelihoods are threatened. We will provide investment and extra resilience to essential services, and do what is necessary to suppress the virus until a vaccine can be provided. We will continue to fund the Nightingale Wing of the General Hospital, we will distribute Personal Protective Equipment (PPE) as and where needed, and we will fund the provision of a vaccine to tackle both flu and Covid-19, when it becomes available for Islanders. To drive our recovery, we will also continue to provide support to Island businesses through new economic stimulus and growth initiatives. We have already seen the success of early schemes, including direct payment of approximately £1 million to Income Support and Pension Plus recipients, the reduction of employee Social Security contributions by 2%, and an injection of £11 million into the local economy through the £100 Spend Local Card scheme. A programme of timely, targeted and temporary measures to support the economy through the remainder of the year and into 2021 will be established, with States Assembly approval, through a new Fiscal Stimulus Fund. We must be also be prepared to address the long-term impact on our public finances. The cost of the health and economic crises, combined with anticipated reduction in government revenues, has resulted in unprecedented financial deficits in 2020 and 2021. These exceptional circumstances pose a very real threat to the sustainability of our finances. This plan sets out the prudent and measured steps that Ministers will take to address those deficits, while continuing to provide necessary investment in our essential services, especially health and education, and a longer-term plan to balance budgets by 2024. To cover the costs of responding to the pandemic, Ministers are proposing borrowing up to a maximum of £336 million next year, in addition to the Fiscal Stimulus Fund of £50 million. Should the States Assembly approve current plans to move to Current Year Basis (CYB) taxation, then the future repayments of the 2019 tax liabilities for Previous Year Basis (PYB) 9 Our ambition taxpayers will repay much, if not all, of this debt. Therefore, although Covid-19 has caused some financial challenges, the direct financial cost can be offset without a permanent increase in taxation, consistent with the long-term thinking and prudent approach that Jersey is renowned for.
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