Capital spending may be reduced under the plans

The Finance and Economics committee's president, Senator Terry le Sueur, claims amendments to the 2004 budget have increased the island's projected deficit in 2005 from �17m to �20m.

He said says before changes were made to Jersey's tax structure, the States needed to demonstrate it was making every effort to cut unnecessary costs.

His committee plans to ask the States to agree to a revised revenue expenditure target, which would mean cutting spending by �20m.

Finance is also considering whether capital spending should be reduced.

The proposals will be put to committee presidents on 16 January before being taken to the States.