The Chamber of Commerce has welcomed measures in the Budget to boost take-home pay for lower earners, while continuing to voice concerns over Government efficiency and the use of reserves.
Chamber welcomed a number of announcements, including the increase in the personal tax allowance by £2,250 to £17,000, and the retention of the basic rate of income tax at 21%.
“The decision to retain the National Insurance holiday for returning students is also a positive step to encourage students to return to the island, build futures and contribute to the island’s future,” a statement said.
Pensioners will benefit from the continuation of the Triple Lock, with the Manx State Pension increasing to £263.55 per week.
However, Chamber highlighted several concerns, noting that despite the positives, most people are still no better off than when the basic tax rate stood at 20% two years ago.
“The fundamental question about the cost and size of Government remains unanswered. Public sector pay now stands at £605 million, with pension costs of £161 million, accounting for well over half of total Government expenditure.”
Chamber warned that planned savings of £10 million over five years are “not proportionate to the scale of the challenge”.
On public sector pay, Chamber said: “If the island is serious about restoring financial resilience, public sector pay restraint must be considered. At the very least, a freeze should be on the table.”
The organisation also raised concerns about reliance on reserves, noting that with over £1 billion already drawn down in recent years, “that trajectory is not sustainable”.