Budget a missed opportunity, business lobby says

The Isle of Man Chamber of Commerce represents more than 500 firms

The Isle of Man's budget for the year ahead has been described by a lobby group as a “missed opportunity” to address the issues facing businesses.

Treasury Minister Alex Allinson laid out the financial plan for 2024-25 earlier this week, which included a 2% rise in the higher rate of income tax.

Reacting to the measures, the Isle of Man Chamber of Commerce said the budget showed the government was “in denial” over the “harsh realities” facing firms.

In response, Dr Allinson told the BBC the budget provided “financial certainty, consistency and stability”.

The business group said rising costs and labour and skills shortages were key concerns for the industry.

In his budget speech, Dr Allinson described the measures as a “financially responsible budget with the long-term financial health of the island and its economy as a central focus”.

However, the chamber said overall it would “not drive economic growth or address the main challenges that businesses in many sectors are facing”.

'Failure to focus'

In a statement, the chamber said the forthcoming tax changes would increase “disparities” as they would make the island “a less attractive option for workers from overseas”.

It added: “We also need to consider that many experienced and highly qualified professionals in critical roles with island businesses right now have plenty of options to relocate to competitor jurisdictions.

“This budget is unlikely to help employers address any of these challenges.”

The chamber said increasing the tax burden for many workers, “especially single people and those on lower and middle incomes”, while increasing government budgets showed a “continued failure to focus on making departments more efficient and providing better value for money”.

However, it said it recognised “some positives” in the budget.

These included investment in the Child Care Strategy, which would help workers in need of childcare, and a review of procurement regulations to “maximise benefit to the local economy”.

Responding to the chamber’s statement, Dr Allinson said changes to national insurance contributions would “mean that most people on or near the minimum wage will actually be better off”.

He said “significant changes” to child benefit would support working families, while those who were retired would see an increase in the state pension.

The government remained “committed to investing in the local economy through the Economic Strategy Fund, he said, adding that "major projects" were under way to rejuvenate brownfield sites.

More affordable housing, reliable air connections and grants to help local businesses expand and succeed were also a focus, he added.

He said the government would continue to work closely with businesses to "pursue the common goal of working towards a more secure, vibrant and sustainable island nation for all".