The sitting began with The Acting Governor, Dave Morgan delivering the annual address on behalf of Her Excellency The Governor Alison Blake.
Once greeted by the Speaker of the House, Mr Keith Biles, The Acting Governor Dave Morgan gave the annual address to the assembly on the budget for the new financial year.
He reflected upon the previous year and praised the country on the first full tourism season for land and cruise based passengers since the COVID 19 pandemic. He commended the careful financial decision making of the government and that we yet again enjoyed a budget surplus despite global inflationary pressures. Looking to the year ahead he set out the ambitious plans for the Islands.
The Acting Governor praised the ambitions of the Islands looking ahead to the advancements in hydrocarbon exploration and the port development to the development of the power station and investments in renewable energy.
He commended the successful by-election and last year’s busy public diplomacy season highlighting the importance of maintaining a productive dialogue with politicians around the world to promote the Islands right to self-determination.
This year’s budget reflected the government’s commitment to protecting and prioritising the environment. The Acting Governor commended the work of the Environment Department this past year with the work on the national park in Hill Cove, the new energy strategy and pollution prevention and waste management policy. He reflected on the challenging year the Veterinary Department experienced with the outbreak of bird flu and government response with the implementation of a compensation scheme.
On to sustained economic development for the Islands, the acting governor commended the fisheries sector, as they remain the main economic driver of the Islands economy.
The tourism sector had a successful season, making a strong recovery from the pandemic with 70,000 cruise ship passengers visiting the islands during the 23/24 season.
The Acting Governor touched upon Government’s Oil readiness work and the progress made on the project including the recruitment of new team members to assist in preparing for the project.
Other key projects mentioned included the development of the new port, the new sports facility, the sand bay wind farm, gold exploration and the asphalting of the MPA road.
The Acting Governor highlighted the work Development and Commercial Services will be undertaking on the telecommunications license.
In health, wellbeing and social care part of the address the acting governor highlighted successes in the sector including the new orthodontic service, the mental health work by the emotional wellbeing service, the adult safeguarding work by social services and the government’s major investments in Tussac House.
Moving on to education, he commended the excellent results for children at IJS and Camp Education in their final primary year assessments and the shield programme with its first member successfully transitioning into paid employment.
In safety and security, the Acting Governor commended the emergency services in the Islands. Links between Royal Falkland Islands Police and the Royal Gibraltar Police are strong, providing opportunities for new officers to undertake initial police training overseas. His Majesty’s Prison commenced 24-hour operations after an external review in 2022. He praised the work of the Fire and rescue service for their busy season responding to wild fires and the continued training of retained firefighters.
In rounding up the 30 minute address, he reflected on the work of the civil service and the importance of recruitment in the sector.
MLAs thanked the Acting Governor for his words and took the opportunity to voice their agenda priorities for the upcoming year.
After the motion, the assembly took a brief recess. After the recess, the assembly moved onto the budget itself, where papers were laid on the table by the acting chief executive Andrea Clausen. Amendments to the Stanley Common Regulations, Maritime Labour regulations and the Law and revision publication ordinance were laid on the table.
Amendments to the Stanley Common Regulations allowing for the development of a road at Cape Pembroke as part of the lighthouse restoration project were noted.
Amendments to the Maritime Labour regulations were also approved, updating the regulations for seafarers that are taken into captivity as a result of piracy or armed robbery against a ship, improving the quality of food provided for seafarers on board a ship, providing for the repatriation of seafarers bodies and improving the promptness of medical care for seafarers. These amendments were also noted.
Amendments to the law revision and publication ordinance were noted as well as the annual audited accounts in the FIG Financial statements for 2022/23 with no objections.
Reports from the public accounts committee were also laid on the table including an update on the Islands Plan internal audit.
Financial statements published included Falkland Islands Museum and National Trust, Media Trust and Falkland Landholdings Corporation. The PAC commended the Media Trust for sustaining their work on a limited budget. No comments were made on Falkland Islands Museum and National Trust and Falkland Landholdings Corporation accounts. The accounts were all noted with no objections.
These accounts are available on the PAC website.
The assembly moved on to the questions for oral response section where two responses by MLA Gavin Short were given in relation to a supplementary question asked in the previous meeting and three questions by MLA Mark Pollard were posed.
During April’s meeting of the Legislative Assembly MLA Mark Pollard questioned MLA Gavin Short on the take up of the FIDC shared risk scheme. MLA Short confirmed that 1 business had taken up the scheme and that there had been no further enquiries. MLA Pollard and MLA Roberts shared their disappointment in the poor take up rate.
MLA Gavin Short responded to another question posed at the previous month’s assembly meeting on how many ambulances are in operation and is there enough. He responded that there are currently two ambulances in operation that is more than enough, not included the new ambulance that is out of service. MLA relayed to the assembly a list of issues with the new ambulance that PWD had identified including issues with the rear door not locking in the open position and the air conditioning unit positioning causing the driver to be in direct line of any debris or gravel flicked up from the front tyre. Additional problems including the leak in the roof and malfunctioning battery charger have been fixed at the expense of the supplier. The main outstanding issue is the leak in the piped oxygen unit – this could take several weeks to supply.
MLA Mark Pollard posed a question to MLA Roger Spink on whether travel credits can be used for flights to and from Ascension or St Helena. With MLA Spink not in attendance, the financial secretary, Pat Clunie gave the response. He explained that travel credits can be used for both flights however, flight booking for St Helena is through two flight booking agents. FIG are in discussion with St Helena government to streamline this into one single agent.
MLA Pollard raised another question to MLA John Birmingham on the take up of the extensions of rent support to private sector tenants. A proposal to equalise the support available to social and private sector tenants was agreed by executive council in June 2022 and was rolled out by the income support team from the 1st July 2022 with a cap on the amount available to private sector tenants.
The third and final question raised was by MLA Pollard to MLA Ford on what the PRP quota has been over the last five years and whether it has been reached. MLA Ford responded that in the last two years the 90 person quota per year had been reached prior to the deadline. This caused debate over whether PRP quotas should be capped, if the cap should be removed altogether and if the quota needed to be reviewed again.
Moving on to the Appropriation Bill 2024, The financial secretary, Pat Clunie highlighted that the number of budget select committee meetings was less than previous years which reflected the focus and clear thinking of the decision making. He confirmed the forecast operating budget surplus would be £55.7million in the current 23/24 financial year compared to an original budgeted surplus of £21.5 million.
The financial secretary reaffirmed the reserves policy of maintaining at least 1.5 times adjusted departmental operating expenditure in unrestricted reserves. The financial secretary praised the Falklands strong financial position and acknowledged the important contribution the private sector has to the budget:
The Financial Secretary proposed the Appropriation Bill total of £146.2 million. He projected the total income for 24/25 at £129.1 million with an operating surplus of £27.3million. He gave a breakdown of the bill into three different expenditure categories:
Departmental net operating expenditure – £91.2million
Island Plan Investments – £10.6million
Transfer to the Capital Equalisation fund – £44.4million
Turning to departmental operating expenditure he highlighted significant changes that led to the £91.2million figure including increases to commercial contracts, an increased budget for Natural Resources for oil readiness and fisheries protection and increases to the winter fuel allowance, family allowance and nursery subsidy as well as a 5.5% cost of living pay award for FIG employees.
Moving on to the Island Plan budget of £10.6 million, £630,000 was included for the travel credit scheme. £3.4 million was allocated for overseas medical treatments. The following subvention allocations were agreed:
• £700,000 to the Tourist Board
• £500,000 to Falkland Islands Meat Company with a further contribution of £73,500
• £290,000 to the Media Trust with a further contribution of £11,040.
• £550,000 to be made available to Falkland Islands Development Corporation
• £170,000 to the National Sports Council.
• £210,000 to Falklands Conservation.
• £80,000 to SAERI.
• £875,000 to the Falkland Islands Museum and National Trust for the development of the lookout gallery
• £205,000 to small community groups and charities
£2.2million was also allocated for the ferry service.
The financial secretary rounded up the bill with the fund transfers section highlighting that no contribution through fund transfers is budgeted to the pension scheme fund for 2024/25.
He clarified that the scheme will undergo an actuarial review on 30th June 2024.
In speaking to the motion of the bill being read a second time, MLA Teslyn Barkman commended the budget on dealing with cost of living pressures and prioritising environment and health. However, she did not agree that the bill addresses income inequality in the Islands.
In reporting on the proceedings of the select committee on the estimates in relation to the capital programme and capital expenditure, the financial secretary highlighted the large infrastructure projects that are scheduled to begin will overlap with existing ongoing projects, leading to a review of the 10 year capital programme.
Major projects in the capital plan for 24/25 include the new power station, new waste management facility, sand bay wind farm phase 3 and continuation of the MPA road. Further work is ongoing for KEMH development, ICT hardware and software, water treatment, camp jetty renovations, industrial infrastructure and the new cemetery.
The Capital programme also includes continued investment in ongoing programmes including the camp network, utilities, vehicles and plant. It includes new additions totalling £11.6 million for Sand Bay Windfarm Phase 3, the next tranche of housing plot development, ICT replacement of critical infrastructure, fit out of the new sports facility, and security screening equipment for Aviation and Maritime.
The financial secretary reiterated that the capital programme could change with supply chains being effected by global issues that impact project timings and costings and the limit on the supply of labour in the Islands.
He went on to underline the importance of the development of the new port facility and the effects it could have on future capital expenditure. He explained that the estimated £100-£120 million pound project was not included in the Capital Appropriation for 24/25 due to the uncertainty regarding the overall costs and timing of expenditure. The costs and estimations for the road and causeway have been included in the 10 Year Capital Plan and the medium term 5-year operating budget.
Although government cannot fund the port upfront using current and anticipated levels of reserves, the financial secretary gave a message of reassurance regarding the borrowing of funds for the new port facility.
Rounding up the capital appropriation bill, the financial secretary proposed the withdrawal of £44.4 million pounds for capital projects within the capital programme.
MLA Teslyn Barkman spoke to the motion highlighting the significant investment for the future of the Islands with the borrowing of funds from third parties for the new port facility. She reiterated that the decision was not an easy one.
In speaking to the motion, MLA Jack Ford highlighted that he did not entirely agree with the allocation of funds.
During the reading of the finance bill, the financial secretary spoke on prices charged by government increasing by 5.5% in line with the retail price index forecasted for 2024.
Electricity, the sale of quarry materials and hire of public buildings will not be increased. Registry fees and charges other law and regulation charges will not be increased.
Stanley leisure centre membership fees will not be increased as well as Stanley Airport charges.
On to the increases: housing rents and both veterinary charges and department of health fees will increase by 5.5%.
A FIGAS non-resident £5 excess baggage rate will be implemented from July 1st 2024. Non-resident fares will increase by 5.5%. Resident fares will remain unchanged.
The winter fuel allowance has increased from £865 to £916 per qualifying household with immediate effect.
From the 1st of January 2025 the following will increase:
the minimum wage will increase from £8.57 an hour to £9.19 an hour.
The bank license fee will increase from £15,000 to £16,000.
Retirement pension employers and employee contributions will increase by 8.3% to £23.34 per week.
The embarkation tax for cruise ships passengers will increase from 30 to 32 pounds per person.
Personal tax allowances will increase from £15960 to £16860.
The 21% tax band threshold will increase from £12000 to £18000
From the 1st July 2024 the following will increase:
Weekly pension payments will increase by 8.3% to £192.57.
Childcare subsidiary scheme rate will increase by 15p per hour to £2.10 for bronze and £2.35 silver, and by 10p per hour to £2.55 for gold.
Family allowances will increase by 8.3% and remain tax free, worth £92.20 per child per month.
The household fuel and power allowance has been discontinued.
In rounding up the budget, the financial secretary thanked government officers and the treasury for assisting him during his first budget. He remained positive when looking ahead to the financial future forecasted in the upcoming years for government.
Both MLA Barkman and MLA Roberts thanked the financial secretary and his team for their work on the budget but highlighted that the childcare subsidy scheme needed further improvements.
Two bills were heard during the order of the day bills section of the legislative assembly sitting.
The Domestic Abuse Bill 2024 set out to assist victims of domestic abuse to enable them to make applications for protection without the requirement to involve the police or any other statuary body such as social services. It is hoped that this will remove any invisible barrier to victims who require support and are reluctant to involve outside agencies.
The Employment Protection Amendment Bill aligned the retirement age of women with men by increasing women’s retirement age from 60 to 65. Other changes included amendments to redundancy payments and financial protection for individuals who may be affected by unfair dismals.
The Domestic Abuse (Civil and Family Proceeding) Bill 2024 and Employment Protection Amendment Bill 2024 were both passed.
During the Customs Resolution Motion, increases to customs and import duties came into force on the 6th June. These included:
Beer cider and perry from 41p to 43p per litre
Wines from £1.03 to £1.09 per litre
Spirits from £15.56 to £16.42 per litre
Cigarettes from £504.06 to £531.78 per kilo
And tobacco from £337.71 to £356.28 per kilo
MLA John Birmingham spoke to the Customs Resolution motion, highlighting that he felt disappointed that vapes had not been included within the amendments.
During the motion for adjournment, Members of the Legislative Assembly spoke on variety of topics ranging from the issues with the power station, telecoms in the Islands, the upcoming meeting of the C-24 and investment in Education infrastructure. MLA Mark Pollard highlighted the importance of living in a democratic society and supported the use of petitioning to enable voices in the community to be heard.
MLA Leona Roberts echoed MLA Pollard in her support of petitioning. She encouraged public debate and scrutiny but, raised concerns on how recently social media has not always used in a positive way.
MLA Short praised the use of petitioning regarding Starlink and telecoms in the Islands, inviting a representative from Sure to address the Select Committee during the review process of the petitions.
The sitting of the Legislative Assembly concluded at around 1.00pm; a mammoth 4hour session. Multiple challenging factors have affected this year’s budget, including the rise in inflationary costs and the pressures of an increased cost of living.
Despite this, a surplus has been maintained. However, with an increase in spending on capital projects, rise in inflation and substantial financial borrowing needed for the new port facility on the horizon, one question still remains. Will the islands be able to maintain its strong economic position in the upcoming years and continue to support the lower and middle income members of the community in the long term? We will have to wait and see.
Full details of the government budget can be found on the government website www.falklands.gov.fk
