previous financial crises unscathed, it is too soon to say whether this will be the outcome this time. As ever, the fortunes of the Jersey
economy will be determined to an extent by how things play out on the global stage. Whatever the outcome of the credit crunch, our policy focus on containing inflation and improving efficiency and productivity will allow our businesses to grow their market share and maximize the island's economic performance. Ageing population - As with a number
Agriculture, including growing the renown Jersey Royal potato, is important socially and environ- mentally and is now also a growing contributor to the economy.
rate of corporate income tax of 10 per cent for specified financial services companies such as banks) is planned for 2009. This will allow the financial services industry to continue to prosper in the future, thus minimizing the effects of growing international competition and European Union rules on harmful tax practices. To address the resulting fiscal deficit,
the island has put a package of measures in place, including making government efficiency savings, reducing tax allowances for higher earners and introducing a simple, broad-based three- per-cent Goods and Services Tax. GST has a number of advantages relative to other taxes in that it excludes exports and includes imports, and it will make future tax revenues more stable and predictable. Promoting economic stability - In
2006 the States agreed, as part of the Economic Growth Plan, to a new fiscal framework for Jersey that will help to improve economic stability and control inflation in future by making fiscal policy more countercyclical than it has been in the past. This includes the creation of a
Stabilisation Fund with money being transferred in or out as appropriate each year and the establishment of a Fiscal Policy Panel made up of three independent leading economists. The Panel will publish an annual report from 2008 onward covering their views on economic conditions and States' finances.
It will advise on whether economic conditions merit running surpluses or deficits and whether funds should be moved into or out of the Stabilization Fund. Credit crunch - The global credit
crunch precipitated by developments in the U.S. sub prime market means that the uncertainty surrounding the global economic outlook is greater now than in recent years. We do not yet know how the credit crunch will play out. While the world economy has ridden through many
of other developed economies, Jersey faces an ageing population issue. Our research shows that over the next 30 years the decline in the birth rate and rise in life expectancy will mean fewer people of working age and more people over retirement age. The government is consulting the
public on what the policy response should be and how islanders view the options available, such as economic growth, working longer, paying more tax and social security or allowing more people to live on the island. Despite the known challenges
discussed previously, Jersey remains well placed to secure above-average future economic growth, based upon growth within its internal market and through States initiatives underway to support local businesses in securing increased levels of value-added business from export markets.
The island’s history and its scenic coastline are contributing to a tourism revival.