Jersey‘s Treasury Minister has insisted that the island can still afford to fund projects like the Overdale Hospital and Fort Regent’s redevelopment despite recent market volatility.
Deputy Elaine Miller says the public finances have proved “remarkably resilient” in the face of the financial turmoil triggered by US trade tariffs.
However, Jersey’s Stabilisation Fund – which supports the island’s economy during an economic downturn – is virtually exhausted.
And there are concerns that money budgeted for the island’s major infrastructure projects may become unavailable due to recent decisions by the US.
The main concern regards the Pillar 2 taxation scheme after US President Donald Trump withdrew from the global tax deal.
Pillar Two is an OECD scheme that taxes companies with a turnover of more than €750 million by 15%, with millions meant to be raised in Jersey to go towards Overdale Hospital.
Treasury Minister, Deputy Miller, has reassured islanders that the Stabilisation Fund is not their main reserve, explaining that money from contingencies will protect the economy from market turmoil.
The Minister explains: “What we need to think about is it’s good to put money into the Stabilisation Fund for a long-term serve, but we also need to think about what might happen this year.
“We may decide to put money into contingency reserve, so that would act more like an instant access.
Deputy Miller also says that Jersey is in a “very good place” and has “significant reserves”, adding that the island has “weathered storms before”.
The Minister adds: “We have low levels of borrowing in comparison to other jurisdictions, and because we have reserves that enable us to borrow.
“If we need to borrow for something like the hospital or the Fort, we will be able to do that, and those big infrastructure projects will absolutely continue.
“We will fund them, and the hospital is absolutely going to happen.”
Deputy Helen Miles, Chair of the Corporate Services Panel, says that while she agrees that Jersey is economically in a good position, she remains concerned over how major infrastructure projects can be acheived.
Deputy Miles explains: “Because of everything happening in the global markets and particularly decisions that are coming out of Washington over global tariffs, that money is now not guaranteed.
“The Panel is concerned that Jeresy won’t have that buffer to cope with the trials and tribulations of what’s going on globally.
“We understand all the reasons why Fort Regent’s regeneration is a good idea, but if we’re not going to get the Pillar 2 receipts and we’re not going to be able to fund the hospital in that way, I think we just need to be patient and be prudent about other money that we’re likely to borrow.”
Deputy Miller has clarified that Fort Regent’s plans are still in the consultation stage and would most likely not have used Pillar Two funds.
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