BUDGET SPEECH 2016/17

Financial Secretary Colin Owen this morning delivered his fourth Budget Speech for St Helena, following agreement of the BAM budget settlement with DFID on 17 March 2016.  Total support provided by DFID for 2016/17 will be £22.5m.

Financial Secretary Colin Owen said:

“This budget may not upset people like the previous one did, but I believe it to be more important than any I have delivered – because it sees a significant increase in expenditure.

“This makes it unlike any budget in recent history or maybe ever – with an overall increase in spending of more than £4.2m.  Today’s budget is less about raising revenues but, rather, of ensuring that those revenues are allocated to the Island’s priority areas – such as safeguarding those in need, old or young, driving improvements in our health service and ensuring we keep our educational commitment to sending our talented young people into higher education. 

“Your tax contributions – arising from the changes I made last year – are making these differences possible.”

Highlights from the 2016 speech include:

• Total support provided by DFID for 2016/17 will be £22.5m, an increase of over 9% from last year
• In 2016/17, SHG plans to spend just over £36m in recurrent expenditure. This is an increase of some £4.2m compared to last year and an increase of over £7m since 2014/15
• The most significant spending increases are in Health and Safeguarding
• Spending on Health will increase by 68%
• Spending on Safeguarding will rise by 43.5%
• Additional support in the year ahead for fishing and farming 
• Revenues in taxes and duties in 2015/16 exceeded those forecast
• Last year’s increase in the basic level of income tax by 1% and the introduction of a higher tax band of 31% for income over £25,000 were very successful and contribute to the increased spending on public services announced today
• For the year ahead, no significant changes in taxation. Emphasis on stability
• Basic rate of tax remains at 26%, Personal tax allowance stays at £7,000, Stamp Duty remains at 2.5% and  income tax paid by companies stays at 25%
• Total forecast revenue for the year is £32.4m
• Annual inflation of the retail price index is low, with a predicted figure for 2015/16 of around 3%
• 2016/17 will see a further increase in both Basic Island Pension (BIP) and Income Related Benefits (IRB), at a cost of £100k.  
• £173k set aside in this year’s budget to support a new Community College for St Helena
• Free prescriptions for all those aged over 65 years

Colin Owen commented:

“I believe the increased investment in public services announced today puts St Helena in a good place.  Our increased revenue streams, plus a significant increase in support from the UK, allow us to support a host of new expenditure areas across health, education and safeguarding.”

The full Budget Speech is available on the SHG website at: https://www.sainthelena.gov.sh/wp-content/uploads/2013/01/BUDGET-SPEECH-2016-.pdf

SHG

18 March 2016