In its sixth annual report, the Fiscal Policy Panel said the island failed to deliver the planned fiscal stimulus in 2012 and early 2013 and that there was significant spare capacity, adding that “fiscal stimulus is therefore merited to support employment and businesses in a timely, temporary and targeted manner”.
The Fiscal Policy Panel was established to provide Jersey’s Treasury and Resources Minister and States members with independent economic advice on matters relating to tax and spending policy, and the use of the islands so-called Stabilisation Fund.
Panel chairman, Joly Dixon, said it was disappointing that States capital expenditure in 2012 was not able to support the economy to the extent anticipated and this contributed in part to the weaker than expected performance in 2012.
“However, the panel are encouraged to see that the Treasury has made improvements which should allow it to more effectively implement fiscal stimulus for the remainder of this year and in 2014,” said Dixon.
“From 2015, however, as spare capacity is eliminated, the economic impact of the large capital programme will need to be carefully managed.”
