An extra £2.5m will be spent on "redesigning and modernising" policing in the Isle of Man, the Treasury said.
In his 2019 Budget speech, Treasury Minister Alfred Cannan said the investment will ensure more officers are available to tackle crime and support vulnerable people.
Personal tax allowances, meanwhile, are to increase for a third straight year.
The rise to £14,000 will boost incomes by up to £150 a year and take another 1,500 people out of paying income tax.
Total government spending projected for 2019-20 will be £1.038bn.
The new Manx state pension, which will be introduced on 1 April, has been set at £184.15 per week - £16.50 higher than in the UK.
A new sugar tax will also be introduced on the same day and is expected to generate about £300,000 per year. This money will be used to "tackle childhood obesity", Mr Cannan said.
The Treasury Minister said his plan was borne out of "confidence and not of complacency" and that the government's accounts were forecasting a surplus of £28m in the current year - £18m more than previously forecast.
While acknowledging the ongoing uncertainty around Brexit, with a further £1m set aside to continue negotiations, Mr Cannan added: "We have solid foundations on which we can adapt to meet our challenges.
"In a year that promises international political and economic turbulence, this budget provides a platform for confidence in our island and the future."
Significant investment in the island's road and telecommunication infrastructure was also announced, along with £30m secured to build a new ferry terminal in Liverpool.
Other key capital investments include:
- £5.6m in modernising Ronaldsway Airport (Five years)
- £2.3m Douglas promenade walkway improvements
- £48m for highway schemes (Five years)
- £24m Heritage Rail (Five years)
It is part of a £479m five-year capital investment programme.
A new National Insurance Holiday Scheme was also announced in a bid to to attract workers to the island and graduates to return.
It would see those eligible able to claim back up to £4,000 of their National Insurance Contributions after 12 months of employment.
Parents of students studying off-island have also been considered, with £1.5m set aside to help with maintenance grants.