The island is in a better position than many economies despite the risks and threats we face, according to chief financial officer in the Treasury Malcolm Couch in an address to the Institute of Directors breakfast meeting at the Palace Hotel.
Mr Couch, whose theme was ‘Working Towards Sustainable Public Finances in the Isle of Man’, said the Government’s fiscal aims are to continue to grow the economy, balance the budget in 2015/16 and have a sustainable budget thereafter.
Despite the challenges, he advised that the rebalancing in 2015-16 remains on track, and if this is to continue 2014-15 savings must be achieved and pay pressures absorbed.
He said that three examples of threats facing the island’s finances are the sustainability of the National Insurance Fund, the cost of implementing recommendations coming out of the NHS quality reviews and on-going economic and industry risks which have to be monitored, anticipated and dealt with.
Referring to issues that have to be faced, he highlighted the fact that the number of people aged over 65 on the island is expected to increase by 93 per cent over the next 30 years; during that same period the total population is expected to grow by only 20 per cent, adding that the number of state retirement pensioners is increasing by 300 per year.
In addition, Mr Couch told members and guests of the IoD that inflation adjusted expenditure on social security benefits has grown 46 per cent over the past 12 years – in cash terms up from £109m to £249m per year at the same time that the population grew by only 11 per cent from 77,000 to 85,000.
challenges
IoD chairman Clive Parrish told the meeting that Mr Couch did not overplay the economic opportunities the island has and neither did he exaggerate the challenges and threats.
‘You really do think you are listening to the voice of reason,’ said Mr Parrish. ‘The real challenge to the business community is to engage with Government in a positive way and help them steer the island through the ‘‘rough waters’’ ahead. I meet directors who are optimistic about the future and I meet those who cannot see a way forward and are very concerned. There are those that engage and try to make positive contributions to the debate but there are many who simply seem to want to tell government that the things they are doing are not the right thing but without coming up with fair and reasonable alternatives.’
Mr Parrish added: ‘It is now time for more of us in the business community to come together and work with Government and civil servants in the spirit of the Three Musketeers ‘‘all for one, one for all’’.
‘I hope that the Institute of Directors can play an increasingly important role in helping to facilitate constructive dialogue and debate that can help shape the future of the island for our children and our children’s children.
‘The business community accepts that the Isle of Man has its challenges. However, the island is not starting from a position of despair and whilst it needs to act there does appear to be time to consider and implement whatever needs to be done.’