Guernsey's States' finances for 2021 are better than forecast, with a surplus of £13 million.
Revenue was £46m higher than expenditure, despite a predicted £33m shortfall.
A booming housing market generated £12 million more in document duty revenue (£32m against £20m budgeted), but the States didn't make the expected savings in service delivery.
The government took £28m more in Income Tax receipts and Customs Duties were up by £6m.
The Treasury is warning the income levels experienced last year won't continue, and there is still a deficit once capital spending in the region of £60m is factored in.
“In terms of the Bailiwick’s continued response to COVID and what that’s meant for our economic performance, for jobs and businesses and for public finances, 2021 has been much better than expected and that’s a credit to this community.
But we should not expect this very exceptional time to continue and become the norm and we need to be really careful not to be lulled into a false sense of security.
It’s really positive to have had this good performance, and it puts us in a good position for moving forward, but overall when you include the Bailiwick’s capital spending needs, we remain in a deficit.” - Deputy Mark Helyar, Treasury Lead for the Policy & Resources Committee.
Covid business support cost 22m compared to the £5m budgeted - because of the island's second lockdown.
The government says the support is a factor in the economy's overall strong performance, with low levels of unemployment and business failures despite restricted trading conditions.
Committees spent around £11m less than expected. They also delivered only around £1m in savings as part of service delivery transformation plans, compared to a target of £7m.
Chief Minister Deputy Peter Ferbrache says the need for the ongoing Tax Review to find new ways of raising revenue remains clear:
“The changes in our population which present such significant problems for us when it comes to securing essential services long-term are exactly the same today as they were yesterday.
Financially, we have recovered from the impacts of the pandemic much faster than expected, but we cannot realistically expect that rapid pace to continue indefinitely.
That said, further growth in our economy long-term is absolutely something we need to see and we’re relying on it to avoid our annual shortfall being even worse than the £85m currently forecast.
So yes, we’ve seen a good financial performance, but no, our problems do not suddenly go away. We must not lose sight of that longer-term challenge and the need to find sustainable solutions for the sake of future generations of Islanders.”