Isle of Man treasury minister warns of hard decisions in 2023

The Isle of Man government will face hard decisions about spending in 2023, the treasury minister has said.

Alex Allinson said record inflation and high energy prices had "taken a toll" on public finances in the past year.

About £12m was given out in support payments and £26m was loaned to public supplier Manx Utilities to freeze electricity prices until March 2023.

Dr Allinson said the "pragmatic" moves were needed but warned the government "could not carry this on" indefinitely.

He told Tynwald in December that the Treasury would next month ask for approval to repeat payments to those on long-term benefits and pensions to help with winter pressures, which would cost a further £5.6m.

The Ramsey MHK became treasury minister in May following the resignation of David Ashford, and has overseen preparations for his first government budget, set to be announced in February.

"This will probably be a bit of a boring budget," Dr Allinson said, adding that his focus was to give people "certainty that we are spending in the right way".

It comes alongside the government's 10-year economic strategy to boost job creation to show "we have a long-term strategy for regenerating the reserves", he said.

The use of reserves to invest in new infrastructure and frontline services like health and education was "the right thing to do" as part of efforts to "get a more sustainable economy", Dr Allinson said.

Although he would "love to have a throwaway budget", Dr Allinson said unfunded spending could "destabilise people's trust in government's ability to balance the books".

Government departments would be asked to look at what services were not "producing results for the people" and consider how funds could be used more effectively, he added.

Emergency financial support also needed to be reviewed to ensure the economy was not "dependent on taxpayers money propping up various sections of it", he added

He said: "We need to get to a sustainable model where we are earning enough in revenue to pay for expenditure, and also have a thriving economy, and not a zombie economy."

The government was working with Manx Utilities to ensure any price rises at the end of the £electricity price cap "do not derail the economic recovery", Dr Allinson said.

A statement would be made to Tynwald members about that in January, he added.

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