Business groups welcome personal allowance increase but concerned over cost of government

The Chamber of Commerce and Local Economy Forum share their views on this year's Budget

Two groups representing businesses on the Island have welcomed the decision to increase personal allowance in this year's Budget, but voiced concerns over the size and cost of government.

The Isle of Man Chamber of Commerce and the Local Economy Forum have shared their thoughts on government's financial plan for the year ahead.

The Chamber, which represents businesses in a wide range of sectors on the Island, described Chris Thomas's Budget as a 'step in the right direction'.

The body welcomed the £2,250 increase to the personal tax allowance, and said the freezing of the higher rate of income tax at 21 percent "provides stability at a time of economic uncertainty".

However, it says reforms are still needed to improve efficiency.

The Chamber warns that most people are no better off than they were when the tax rate stood at 20 percent two years ago, and that this Budget does not address the underlying cost and size of the system.

It believes meaningful change will only come from reducing the cost base of government, enabling the Island to "remain competitive in the decades ahead".

The Local Economy Forum - a lobby group set up following concerns over now scrapped plans for a 9.9 percent hike to the minimum wage - welcomed this week's announcement.

It says Mr Thomas has taken "swift and decisive action" over the personal allowance.

The Forum echoes the Chamber's concerns over the cost of government, saying its wage bill has "increased alarmingly" in this administration while the economy has "little more than flatlined".

Minister Thomas described this year's Budget as one of "stability, securing and confidence", hoping his plan sets out a pathway towards reducing the Island's reliance on the general reserves.