There’ll be “more money” put back in islanders’ pockets going into the winter, according to the Chief Minister, after States Members unanimously approved a £56.5m emergency ‘mini budget’ to deal with the cost of living crisis.
Key elements in the package of measures, which was approved this afternoon with 46 votes in favour and none against, include:
Tax threshold rises: there will be an increase of 12% in Income Tax thresholds and allowances, including child allowances, additional allowance and child care tax relief, from 1 January 2023.
Social Security contribution cut: There will be a temporary reduction of 2% in Social Security contributions from 1 October to 31 December 2022:
Class 1 employee paid contributions will fall from 6% to 4%
Class 2 self-employed or unemployed paid contributions will fall to 10.5% from 12.5%.
Community Cost bonus increase: doubling the Community Cost Bonus (CCB) from £258.25 to £516.50 in October 2022.
Cold weather payments: A temporary increase to £70 a month from October 2022 to March 2023.
Only one amendment to the budget was successful – a move from Reform Jersey’s Deputy Lyndsey Feltham to help 6,000 more homes access the Community Costs Bonus.
She received unanimous support from the Assembly in asking for the ‘bonus’ - which exists to provide targeted support to low-income households likely to be the most impacted by the cost of GST on food - to include all households where no member has had a tax liability of more than £2,735 for the previous year.
Pictured: Deputy Lyndsey Feltham, from Reform Jersey, brought a successful amendment to the mini-budget.
The mini budget was one of the key tenets of Chief Minister Deputy Kristina Moore's '100 day vision'.
In her concluding remarks before the final vote, Deputy Moore said the mini-budget had emerged from an understanding that the cost of living crisis was impacting all islanders and putting “pressure” on businesses’ ability to recruit and retain people in skilled jobs, and a desire to keep families together.
Deputy Moore said the “ambitious” package, which had been timed to give islanders “more money” to spend ahead of winter, demonstrated that islanders now have a Government “that is on their side and understands the pressures we are all facing” before going on to thank the Treasury officials who had responded to the challenge of drafting the mini budget with “pace”.
Amendments that were thrown out by the Assembly included Reform Jersey leader Deputy Sam Mézec’s bid to do away with ’20 means 20’, which was shot down by the Treasury Minister as a proposal that could threaten the island’s stability - though he conceded that the 20% tax rate policy was not "sacrosanct".
Pictured: Deputy Moore said the mini budget shows islanders that the Government is "on their side".
Also defeated were a proposal from Reform’s Deputy Tom Coles to increase income tax allowances, a proposal from Deputy Catherine Curtis to extend the proposed 2% Social Security contributions cut, and a further proposal from Deputy Mézec to introduce residential rent controls for two years and make fixed term and periodic tenancies open-ended.
It comes after inflation levels recently hit a 30-year high - during the 12 months to June 2022, prices shot up by 7.9%, following a rise of 6% in April this year, which at the time was the greatest rise since the financial crash in 2008.
Welcoming today's result, Deputy Chief Minister Deputy Kirsten Morel said: "The Government's first big action of this new term has been passed unanimously by the States Assembly.
"We should be proud of these moves to help islanders deal with the cost of living through the 'Mini Budget' - no other Government has acted so swiftly to help islanders."
The Govt's first big action of this new term has been passed unanimously by the @StatesAssembly . We should be proud of these moves to help islanders deal with the cost of living through the 'Mini Budget', no other govt has acted so swiftly to help islanders.@GovJersey— Kirsten Morel (@KirstenJersey) September 21, 2022
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