MercoPress. South Atlantic News Agency

Difficult choices for Falklands' “strained” public finances

THE strain on Falkland Islands' public finances is “greater than at any time since the commencement of fisheries licensing in 1986”.

According to a green paper on the Islands budget released Friday: "Some difficult choices" will have to be made in order to keep the Falklands Medium Term Financial Plan on target. "What this means is quite simply Government either has to cut back on spending or we need to raise much more money through taxes or by other measures". It notes that the Falkland Islands Government has been pruning departmental budgets for many years so any obvious economies in that area have already been made. As a result, to bridge the currently predicted £3 million gap in the Medium Term Financial Plan the Government may have to: * Raise £3m from personal tax – an average of £2,304 per year per person. This would hit the lower paid particularly hard. * Raise £3m from company tax – an average of £55,555 per company (for a typical company currently paying £86,295 on a pre tax income of £357,159 in 2006). This would discourage investment and reduce economic growth. * Reduce Health and Education spending by £1.5M each. This would mean ending Medical Treatments Overseas for all but desperately urgent cases and ending all support for students overseas in further and higher education. * Close the Falkland Islands Meat Company (Fimco) and/or cease the East to West ferry. This would mean large parts of the Government's strategy for providing a sustainable Camp would be removed, and money already spent would obviously have been wasted. Reasons for the strain on the public finances is as a result of many factors says the paper, including residents high expectations of the Islands public services, and the Government being required to achieve ever increasing international and UK standards in what it does, for example in terms of aviation and maritime services, medical services and planning policies. The need for continued investment in economic growth and infrastructure also adds to the strain, as does the decrease in fisheries revenue (mainly in the ilex fishery). The paper is intended to: "Stimulate debate and raise the level of understanding of everyone about the financial issues and choices that face the Islands," said a spokesperson for the Falkland Islands Government. He added: "Government intends to devote real time and effort over the next few months to examining the options." By Lisa Johnston – SeaAled PR – Stanley