Senator Alan Maclean said that while temporary measures to make up the shortfall up to 2019 would be included in the 2018 budget, an alternative to the rejected income tax-style charge needs to be found for the longer-term.
The health charge was rejected by the States, due to a tied vote, during last year’s Medium Term Financial Plan Addition debate.
The proposed one per cent levy on earnings, up to a cap of £164,000, would have raised £15 million by 2019.
Senator Maclean told States Members during question time this week that a long-term mechanism to fund increasing health-care costs post-2019 would need to be found by the next Assembly.
When asked by Deputy Andrew Lewis how he now intended to balance the budget, Senator Maclean said: ‘We have seen as a result of the improved performance of public finances through 2016 that the good position of the economy has generated additional income.
‘The revised position for 2019 was that we would have a fairly thin surplus of £3.6 million. As a result of 2016 and the improved position there, that grew to £7.5 million. Again, this is still very thin.
‘But, that relies upon a replacement for the health charge that the Deputy has referred to, which is £15 million by 2019. It also makes an assumption that the waste charges, both liquid and solid, are implemented – that’s a further figure of £11 million.’
He added: ‘With the absence of those two there would be a significant deficit by 2019. These are matters to be addressed and I can tell the Deputy that as far as the health charge is concerned, this year’s budget will include measures which will bridge the gap for the period up until 2019, after which there will need to be long-term sustainable measures put in place for the increasing costs of health as we go forward, particularly focusing on the ageing population.’
The minister would not say what the temporary measures would be, however.
Deputy Lewis asked whether the minister had a plan B, if the proposed measures and the waste charges are rejected by the States.
The minister said: ‘We have measures in this year’s budget … which will provide funding through until 2019 and deal with the short-term issues.
‘It doesn’t deal with the fact that a future Assembly will need to tackle what the long-term sustainable position will be. The Assembly has quite clearly said that a health charge as proposed is not something that’s supported.
‘However, there will have to be an alternative.’
The budget, which is due to be published on 3 October, will be debated later in the year.
