blog.gov.je
By Senator Alan Maclean, Minister for Treasury and Resources
Budget 2027 marks a change of direction in the way we manage Jersey’s public finances.
Public spending has risen substantially in recent years. Some of that additional expenditure was necessary and has delivered important benefits, but higher spending has not always produced better outcomes. We need to change that.
The principle behind this Budget is straightforward: taxpayers’ money should be spent where it delivers the greatest benefit.
Government must live within its means, focus on its priorities and be prepared to make difficult choices. That does not mean cutting indiscriminately. We will continue to invest in essential public services and provide additional resources where there is a clear need. This includes above inflation investment in Health and Care Jersey.
This Budget begins the journey to restore greater discipline to day-to-day spending.
New funding has been prioritised towards commitments from the previous States Assembly such as funding to tackle Violence Against Women and Girls, investment in the Fire & Rescue Service and in the Agriculture and Fisheries sectors.
This is also a Budget of savings. We have already allocated £21 million of recurring savings for 2027 and will continue to reduce unnecessary complexity and costs across Government.
Departments will be expected to improve productivity, stop or reduce lower-priority activity and redirect existing resources towards areas of greatest need before seeking additional funding.
Value for money is not measured by how much Government spends, but by what Islanders receive in return.
Targeted support for Islanders
Financial discipline and targeted support are not competing objectives.
By controlling expenditure and making clearer choices elsewhere, we can direct help towards those who need it most.
Budget 2027 includes measures to help families across lower- and middle-income households with the cost of living.
Alongside this immediate support, Government will undertake a wider review of affordability and consider what other measures might help address it.
The longer-term solution is growing the economy. This matters not only to families today, but to Jersey’s future. Jersey must remain a place where people can afford to live, work and raise a family.
Growth and competitiveness
Fiscal discipline alone will not secure Jersey’s future. We need economic growth.
A productive and competitive economy creates better paid jobs, so that earnings stay ahead of the cost of living. It also generates the revenue to sustain good public services without continually increasing the burden on taxpayers.
Jersey must continue to be an attractive place in which to invest, establish and grow a business. Our international reputation and high regulatory standards are important economic assets and must be protected.
Maintaining high standards does not require unnecessary complexity, delay or cost. Regulation and Government decision-making should be proportionate to the risks involved and should not create unnecessary delays.
Budget 2027 continues the work arising from the Time to Win financial services competitiveness programme and includes practical measures intended to reduce unnecessary costs, support investment and improve Jersey’s attractiveness as a place to do business.
Protecting our financial resilience
Jersey has a strong balance sheet and substantial reserves. They have helped the Island through periods of economic uncertainty and provided vital resilience during times of crisis. We must not take that strength for granted.
The Stabilisation Fund has not been replenished since it was substantially drawn down during the pandemic. The Strategic Reserve is also below the level recommended by the Fiscal Policy Panel and is currently providing the financial backstop for the New Healthcare Facilities Programme. This cannot continue.
Budget 2027 is the first Budget informed by actual receipts from Jersey’s OECD Pillar Two regime. We have deliberately taken a cautious approach to windfall receipts that may be temporary or uncertain.
Income above the approved base case level will not be used to create permanent increases in day-to-day expenditure. Any windfall receipts will only be used for the new hospital at Overdale or to replenish reserves.
The principle is important: we should not fund permanent promises from temporary revenues.
Looking forward
Budget 2027 is just the beginning, not the end, of this work.
From 2028 we will move to a three-year Budget. This will allow us to look more fundamentally at how Government operates, how services are delivered, where productivity can be improved and how resources can be better directed towards the priorities that matter most to Islanders.
It will also provide a clearer long-term approach to expenditure and investment and set out a credible path to strengthen the Strategic Reserve and rebuild the Stabilisation Fund.
The three-year Budget will involve difficult choices, but it also gives us the opportunity to do things differently.
Controlling costs must go hand in hand with growing the economy. Without both, the choices become progressively harder: higher taxes, increasing debt, weaker services or greater pressure on our reserves.
Budget 2027 starts that change. The three-year Budget for 2028 to 2030 will take it further: towards stronger public finances, a more productive Government and a more resilient and competitive Jersey economy.
This is not simply about spending less. It is about spending carefully, investing in what matters most and making sure Government delivers the best possible value for Islanders’ money.