Guernsey government to see revenue shortfall of £10m
Guernsey's treasury minister has warned the government to expect a total revenue shortfall of £10m for 2013.
Deputy Gavin St Pier told States members the tax take this year will fall significantly below their budget predictions.
He said that falling income tax receipts and a subdued housing market were to blame.
He added the island's government should think carefully before spending more of taxpayers' money this financial year.
Mr St Pier made the statement in an update to the Assembly on the overall States financial position - including progress on the delivery of the Financial Transformation Programme (FTP).
It was revealed that health and social services are expecting an overspend which "will not exceed £1.3m" more than their budget allocation this year, while social security is likely to come in £500,000 over budget.
"I am disappointed to inform the Assembly that overall revenues are down against our budget estimates," he said.
"Whilst there are some signs of recovery in our economy, this has not yet translated into income tax collections.
"In addition to this, transactions in the housing market have remained subdued until very recent weeks.
"All in all, my department is now projecting a total revenue income shortfall in 2013 of some £10m."
Reporting on the FTP, Mr St Pier told the Assembly that during June, July and August, FTP projects have released £2.8m of savings bringing the total saved by the programme during 2013 to £6.9m.
"This is a welcome indication that the improvement in the momentum of the programme I highlighted in my last update, has been sustained," he said.
"It is vital that we continue to deliver on the FTP and reach the minimum target set of £31m. So far, we have achieved savings of nearly £18m."
The FTP was introduced in 2009 as a way of dealing with the impact of scrapping corporation tax.
Mr St Pier added that there will be "significant challenges" in the remaining 15 months of the programme and some "difficult political choices".
The announcement is expected to "set the scene" for the Budget Report which is due to be published in two weeks time.