Rob Mercer MLC has warned against using the island’s reserves to fund what he describes as an “unfunded tax giveaway in an election year” as Tynwald debates this year’s budget.
Raising his concerns during a the budge debate, Mr Mercer acknowledged that dipping into reserves had been justified in the past following “black swan” events, including the changes to the reciprocal VAT agreement with the UK and the economic disruption caused by the covid pandemic.
“Our reserves have seen us through those difficulties, and that feels an appropriate use case for them,” he said.
However, the MLC took issue with the blanket approach of proposed tax breaks.
He also pointed to a recent report from the economic policy review committee, which he said highlighted concerns around the use of reserves.
While he noted “there is a lot wrong with that report,” he accepted its conclusions on the structural deficit were “backed up with solid evidence”.
Mr Mercer warned against ignoring the findings.
“I will find it difficult to vote for a budget that continues to add to that structural deficit when we should be doing everything in our power to reduce it,” he said.