| Government revenue up, still running a deficit | | Print | |
| Written by Richard Green/richard@fptci.com | |||
| Friday, 02 September 2011 09:56 | |||
 First quarter recurring government revenue increased 21 percent over the same period last year, but the government still ran a $4.1 million budget deficit from April through June. That deficit was a big improvement over the $17.2 million shortfall in the first quarter of the last fiscal year, but it is still behind budget estimates, the government said in a statement released with its first quarterly financial report of 2011-12. “The most important income streams, accounting for 85 percent of revenues, were as import duty, accommodation tax and stamp duty,” the government statement said. While import duties were up 18 percent over last year, they were still 13 percent below projections. The government said it “will act immediately to deal with any under-declarations or under-collections that may be identified.” Accommodations tax was up, thanks to a stronger and longer tourist season. Stamp duty on land transactions was also up, but that could be from monies recovered by the Civil Recovery Unit. Capital revenue also increased $2.4 million due to land sales due to civil recovery arrangements. Revenue from fees, fines and permits was 16 percent below projections, but some of those have not been fully implemented yet. Total spending on government employees was down 10 percent, with a whopping 41.5 percent reduction in wages — down from $2.7 million to $1.6 million, which was even less than the $1.9 million that was budgeted. Spending for government employee pensions and gratuities increased 33.7 percent, up from $1.3 million to $1.7 million. “The first quarter’s results show that we have started to put the public finances on track to achieve a fiscal surplus in the financial year ending March 2013, reflecting our commitment to high standards of financial management; the immediate priority is to get fully back on track to meet this year’s budget,” the government said. “We have put in place new measures to ensure that the government collects the revenues due to it, and to control expenditure and cut waste. There are still significant challenges ahead, but the U.K.-guaranteed refinancing and the first quarter’s results provide a firm foundation for the future.” The U.K. has guaranteed $260 million in loans to pay off the country’s debts and to finance deficits until the budget is turned around. The target is a budget surplus in 2013-14, when valued-added taxes are implemented. The Ministry of Finance still has a backlog of work to bring government financial statements up to date from 2007-08 to 2010-11. “We expect these to be audited and published early in 2012,” the government said. “We will continue to monitor the state of the public finances closely, and take well-informed decisions about both revenue and expenditure in order to stay on track to achieve a surplus by March 2013 while supporting economic growth and prosperity in the islands.” Achieving a budget surplus is one of the milestones set by the U.K. for the return of elected government, which was suspended in August 2009. Click here to read the first quarter budget summary. Click here to read the complete 2011-12 budget.
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