The Falkland Islands Government yesterday published its budget for the upcoming financial year, describing it as a prudent budget that focuses on stability and continuity. The budget forecasts operating expenditure of £78.3m and revenues of £92.2m, as well as a capital programme totalling £53.5m for the upcoming financial year.
Health related expenditure accounts for the largest share of the proposed investment at £24.6m, followed by infrastructure and communications (£11.6m) and education and training (£10.1m).
With regards to the capital programme, the Government said that the budget now ‘includes the financing of major infrastructure projects such as the potential for a new port and a replacement power station’, and incorporates an ongoing capital programme through to 2029/30. In his speech to the Legislative Assembly, the Government’s Financial Secretary, Tim Waggot, said the ten year programme includes investment in roads, additional housing, quarry capacity, utilities, air services, public buildings, educational facilities, and to allow for inter-generational projects such as a port and a power station.
Mr Waggot also noted that although the budget does not include any additional Covid-19 funding, it is anticipated that unspent funds from the current financial year will be used to continue to support various sectors, particularly tourism.
Meanwhile the forecast operating revenue for the current financial year stands at £97m, constituting a surplus of £11.1m, £1.2m more than had been originally forecast. The revenue figure for 2020/21 is driven by corporation and personal tax receipts (£30m), fishing licence fees (£29m) and investment income (£11m).
Minimum wage up but no cost of living increase for civil servants
The legal minimum wage in the Falklands will increase to £7.26 an hour from £7.13 under the fresh budget. However, in a break from recent years, the Government has decided not to include a cost of living pay rise for civil servants due to ‘an absence of inflationary pressures in the economy.’ Welfare benefits remain unchanged with the exception of the winter fuel allowance, which will be increased to £700 for qualifying households.
Other increases include service charge (up by £25 per year), electricity (increased to 23p per unit), and duty on alcohol and tobacco (up by 3% and 5% respectively).
An approach that concentrates on the essentials
Member of the Legislative Assembly Roger Spink said: We have like the rest of the world, experienced a significant financial impact as a result of the global pandemic, which was completely unforeseen and has had a knock-on effect on our original projections and estimates, yet we are still delivering a surplus in the current year.
‘Our decision to have a ‘no growth’ budget means we have structured our spending in a way that ensures we have the amount needed to fund current programmes and operational costs, yet remain prudent in our approach to public finances. This approach allows us to concentrate on the essentials. We are still feeling the economic impact of the global pandemic and, as such, we need to ensure that we maintain a careful focus on how we invest public money in the year ahead. The ability to deliver a robust capital program remains a key area as we recover from the pandemic, providing jobs and economic activity together with assets that will benefit our community over a long period. It also together with other government support measures mitigates the short term effects of the pandemic.
Mr Spink also said the budget sought to build on the previous budget’s focus on the well-being of the people across the Falkland Islands and the negative impact of Covid-19. ‘That is why we continue to focus on protecting local services that are important to Falkland Islanders,’ he added.
Also speaking to the Legislative Assembly, Governor Nigel Phillips noted that although the budget is the last of the current Assembly, ‘it retains the hallmark of the past three years, which is an energy and an optimism for delivering a brighter future for the Falkland Islands.’