Senator Terry Le Sueur
JERSEY could face a new £60 million tax ‘black hole’ by 2012.
The panel of expert economists who advise the Treasury Minister and the States have warned that a ‘structural deficit’ in States finances is emerging.
And they say that States Members have to act now to tackle spending pressures at departments as well as long-awaited pressure from the ageing population and the New Directions health strategy.
The Fiscal Policy Panel says that the deficits ‘require tough decisions on cutting spending or increasing taxation’ and that States Members have to show discipline about approving new spending.
Article posted on 6th May, 2009 - 3.00pm
95 Article Comments
Hang on a second, did we not have surplus yesterday of £5m from last year which The Treasury Minister dished out to states Departments to waste, sorry spend on their pet projects. Have our states not heard of joined up goverment and basic budgeting ie what you do not spend today you have available to spend tomorrow. No doubt GST will have to go up and states employees to cope with the extra admin…whatever next
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Oh dear,
And thats not even including the black hole that will be caused by lost finance business due to the closing of tax loopholes.
Time to act now and stop being so damn ignorant!!
Increase min wage
Increase retirement age
Stop funding for uni students that dont return
Increase apprenticeships
Have initiatives to get elderly back into work
Wipe out over generous benefits and redefine disability
…and most importantly diversify our industries and stop spending money on unnecessary projects.
In other words…use commonsense! ….something which most of the States members seem to lack!
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Oh dear! here we go again.
2012! I wonder what the dark force is going to create for that year? Perhaps 50% GST?
Hopefully i will have moved away from all this “misery” long before that time.
How about some positive news for a change instead of always being greeted by Senator le suer.
Its very depressing.
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i hope they are not experts who missed the whole credit crunch coming.
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Sounds like an austerity budget in a similar vein to the recent Irish one will be needed.
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Given the States record of avoiding, putting off or just not getting round to even easy dicisions I expect that this will be met with the usual policy deficit that characterised the old committee system and lives on under Ministerial government.
The fact is that Jersey has a weak political system because of the bizarre electoral system that creates a Chief Minister but then deprives him of any effective mandate or ability to set priorities.
A UK Prime Minister backed by his Chancellor can react to a financial crisis by raising taxes and forcing cuts on some departments in a coordinated policy.
In Jersey all the departments including the Treasury are independent fiefdoms and will fight to maintain their status and spending, the result will be the usual policy log jam.
Jersey has a ’sunny day’ political system, it works when there are no problems and the difficulties can be bought off by handing out lollies.
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So we are told by The States GST will not be going up (at least for the next 2 years); Sen Ozeuf has said Income Tax will not be increased; Sen Le Sueur says it would be “Immoral” to charge the 1 1(K)’s more tax so I would love to know what hat they magic all this additional money from. I say that because for the past 3 years they have been “making savings” but actually employing more people and spending more money.
The States pay 15% of their employees salaries into the pension fund (which we all know they don’t actually – that is why we will have this time bomb in the future.) The public sector can no longer say they are underpaid relative to the private sector so their pension benefits that few in the private sector have is now a burden too far for us tax-payers.
The size and expense of the civil service must be cut. We now expect the States to supply everyone with luxury services and not the bare necessesities that they should be providing. We have all enjoyed and benefitted from living in our cosy economically successful island and the civil service has expanded to fill the money it had available to spend. Now the money is disappearing and so must the civil service contract accordingly. The Education Minister goes on about the wonderful exam results our children get – and I would hope so as we spend nearly double per child than in the rest of the UK; the same applies for other services; more police per capita (and paid better than Inner London); more doctors and dentists per capita – I could go on. Put simply we must cut our cloth to our means; hard decisions need to be made and that is what politicians are paid to take. Sen Le Sueur did it with GST; now he must cut spending and the size of the civil services.
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Just in time for GST to go up to 5% then . We were told it would stay untouched for three years. It looks like they have kept to their word, just!
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So yesterday we had £5M to give away and today we have to increase taxation to cover another black hole in 2012! The States better start cutting costs NOW so that we the taxpayers do not have to bear the burden. To say that I have no confidence in the States of Jersey, Council of Ministers and the way Jersey is being run is an understatement.
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Which only goes to prove that he and the c.o.m should NOT be in the states
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A monumental c***-up in budgeting then. Our COM is suposed to be an accountant surely he should have noticed this the last time we did the figures and predicted a deficit. If not, its time to hang up his pencil.
First sign of further tax increase and Im joining the brain drain. Leaving TleS to his private game of monopoly.
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James Deale there is no way in hell I want the retirement age raised. 65 is to long to wait as it is. The elderly shouldn’t be expected to go back to work, the State will probably start by saying it is voluntary so as to appear caring. This will then be used by the state as an excuse to force everyone to work till they drop, don’t fall for this!
Benefits should be as generous as possible and why not? There are lots of rich people making good money from Jersey it is only fair that the rest get as good a deal as them. Yes obviously con artists shouldn’t be getting benfits as it should only go to genuine recipients. The rest of your post is common sense.
However the States aren’t known for common sense, so we can expect GST to be jacked up to cover any shortfalls. It is the States get out of jail free card. I would ask when VAT is going to be knocked off now we have GST? No way does it cost 17.5% in shipping cost to get things to Jersey!!
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well stop the stupid incinerator ,there u go black hole filled twice, and i wish i could fill the hole in my wallet so easily as they do , more tax here ,up the parking there !etc
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So the news is that we “could face” a black hole by 2012.Does this pave the way for another rise in GST to 7%? Which is more certain? Why of course another rise in GST,which is a Pandora’s Box, which has been opened and can now never be closed.Time also to look at the unfair levying of GST on UK transport and shipping costs of goods to Jersey, which equate to 15% VAT and more, with GST then added.Shipping costs do not “add value” to the goods,they rather make them more expensive to the island consumer and detrimentally put small retailers at a disadvantage.No wonder that sales of goods direct from the UK have undermined sales of local retailers and increased tenfold.
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So who’s going to pay for it, not the rich – they pay tax dodgers, sorry accountants to avoid it. Looks like the working man needs to bend over again.
I agree with many comments above, we need to cut back on non essential states employees. This has just started in the banks where some departments have halved in size. People just pick up the slack and the job still gets done, I imagine in states departments there is an awful lot of slack.
Inevitably tax and GST will increase, I may need to go on benefit to cover the defeceit in my wages to pay the increased tax.
I look forward to retiring when I’m 85 and getting away from all this.
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i don,t think they know what they are doing.why don,t they cut their losses and get in a proper accountant?after all they bring in experts for every other thing they can,t work out themselves.look at all the millions they somehow did,nt know about last year.3 times i think they somehow discovered money they did,nt know was there.
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World Class?
My bottom!
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Why do you think they rush/push the GST?
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Something really stinks here…GST will go up to 5% that’s a given but I keep asking myself why did the states introduce this disgusting tax in the first place. We are told that it is to fill the hole created by this 0/10 policy. Now I am under the impression that the 0/10 policy was introduced so Jersey would become more competitive and more attractive for multi billion dollar corporations/companies to hide…sorry I mean invest there money because Jersey is a really nice place and the fact that there is approx 400 billion dollars in deposits in the Island has absolutely nothing to do with tax evasion. So my taxes go up, food prices go up, property prices go to stupid levels and the States keep spending money on projects nobody wants and so on. Well I am so pleased that we have embraced this fantastic finance industry with all the good things that it has brought to the people of Jersey.
Has it really been worth it? Slavishly pandering to the needs of the wealthy and the rich just so they can make even more money. I have lived in this once beautiful Island all my life and watched as the greed and the foul stench of money has slowly corroded it to what it has become today (money black holes and all). So, Council of Ministers, I hope you are happy now.
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There is a parallel here with England. Over there, Gordon Brown made a mess of things while he was Chancellor and, now that he is prime minister, does not have a leg to stand on.
Over here, le Sueur made a mess of things while he was Treasury Minister [and before that, with social security] and, now that he is “Chief Minister” does not have a leg to stand on. A further similarity is that Brown is not a pm elected by the people and le Sueur likewise has no democratic claim to the title [such as it is] of “Chief Minister”.
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anyone want to predict what GST will be in 2020 or 2030?
maybe 30%?
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Sorry all predicted this a few weeks ago – no one noticed….
Income Tax – 30% GST 5% and no, no bets…
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Why not go for a 17.5% GST, coupled with a policy of exposing all retailers who pass off UK VAT as “carriage and freight” ? It would raise an extra £200m a year.
Yes, we would all have to pay it, but alongside it could be tax breaks taking everyone earning under say £40k out of the Income Tax net altogether. Those earning less than £20k could get tax credits so reimburse them for GST paid. So who would actually be bearing the brunt of it ? The higher earners (more correctly the higher spenders) if those measures were introduced alongside it.
Sure – we are not used to paying GST or VAT, but look around you. Only Guernsey (so far) in the European region does not have a GST/VAT/TVA etc. of at least 15%. When you go to the UK do you truly notice the VAT ? Do you only go on holiday to places that don’t have it ? Of course not. Everyone would soon get used to it and the island’s books would be balanced.
Hypothetcailly, if you are currently earning £40k and paying tax of around £7k after allowances, you have around £33k left in your pocket to spend. Even if you spent all of it on items subject to GST at 3% (which clearly isn’t the case) then you’d incur GST of £1,000. That’s £7k Income Tax and £1k GST, so £8k tax in total.
But imagine that instead of paying £7k income tax you paid none at all, you’d have £40k in your pocket to spend. Again, if you spent it all on GST-affected items even at a rate of 17.5% you could only pay £6,800 of GST, so would have reduced your overall tax bill by 15% from £8k to £6,800 !
GST at much higher rates NEED not be the ogre that everyone fears, provided that it is introduced alongside appropriate measures to ensure that the net burden falls in the right place and doesn’t those who can least afford it.
Take the chap earning £120k a year in a god job in the finance industry. Top rate of income tax 20%, no CGT, no IHT, and currently paying just 3% GST on his expenditure. He’s pretty well off compared to the UK and whilst he wouldn’t welcome a higher rate of GST, is he going to leave Jersey because of it ? Of course not. Where would he go to avoid it ? He’d have to go a very long way indeed and the job opportunities wouldn’t compare with Jersey.
Here in the islands we’ve had it too good for too long. Paying GST even at 17.5% would still leave us with an incredibly attractive personal tax regime IF we protect the lower paid from its impact. Its not that difficult to achieve.
The great thing about GST is that. to an extent, its possible to choose whether you incur it or not by deciding how much of your income you will spend. Under the current system with virtually everything taxable at 3% we don’t have that choice, but a full-blown consumption tax at a much higher rate would enable a complete re-think of what should be taxed and what should be exempt, which would be much fairer.
Before anybody shouts me down, please name a single jurisdiction outside of the Channel Islands and within 2,000 miles of us which does not have a consumption tax of at least 15%. It helps to put into perspective how much headroom we have available to us to balance
the books and completely restructure the island’s delicate finances without making us uncompetitive or becoming a high-tax jurisdiction.
Of course its not perfect, but its probably the best possible option open to us if its carefully thought out.
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James Deale: stop funding for uni students who don’t return? how can they return most specialist jobs have gone to uk immigrants, so what is there to come back to?
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there will be no gst in 2030 cos none of us will be living or wanting to live here then! will just be a rock returned to animal life with a bit of luck!!
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This will require more immigration if we are to stick to our current economic model… so goes the thinking of our Members. That and increase GST. Anywhere up to 20%…
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I agree with you Marcus (no 24)Students who are born and educated in Jersey did not choose that path-it was their parents choice surely?If they then choose to stay in the UK or elsewhere after uni it could be because there will be no available job in Jersey within their particular field.One of my children has remained in the UK mainly because she couldn’t live to the same standard that she can here in England (ie owning a large 4 bedroomed house with huge gardens,open countryside,low crime rate and much lower food,clothing prices etc etc.)
And don’t even start me off on GST……..
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Why is this a black hole?
When I lose out on income I don’t call it a black hole I just cut back on my spending!!!!
Seriously can someone in the states look at this like any other business would. Makes Redundancies (It’s unfortunate but sometime required). reduce stationary. Make Directors take a pay cut, Turn off computers, Lights and televisions. Look at more ways to generate income from services, Advertising, Consultancy. Cut back on the use of lawyers and consultants, I’m sure their are people in Jersey who would help out for free and for the good of the island. Use the Collages for gods sake they are their to learn this stuff through the highly paid teachers I’m sure they will be able to a good if not better job then some of the firms we are employing.
This really is not rocket science!!!!
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As with the approach to dealing with the 0/10 black hole a combination of measures will surely be proposed. I can well imagine those including GST to increase to say 5% and the retirement age to increase to 65 or 70. In addition they should plan for real cuts in states spending over the next years which are also required to deal with this black hole. That may involve a freeze on states employees pay for the foreseeable future, a significant reduction in headcount as well as changes to pensions to bring in line with economic realities.
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Time to leave this hell hole! Fed up with living in Jersey
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I did warn of this in 2007
My analysis was appropriate, timely and right. It was even free.
It really is time you listened to the Tax Justice Network. We know what we’re talking about, as is proven time and again.
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It’s not complicated.
We either increase taxes, cut public spending or both.
As a minimum, a States pension should not be paid until people are 67, rising to 70 for those currently under say 50.
PECRS needs to be closed to new entrants and existing entrants moved onto a defined contribution scheme for the new monies they put in.
There should be a moritorium on new States spending. In the last couple of months we’ve had a redundancy scheme introduced, a payout to investors in a scheme that went phut and a widening of the free TV licence scheme. All States members need to learn that their primary job is not to spend money but to save it.
We needs a new drugs policy (I’d legalise and tax the lot) that stops clogging our prisons with young people (often who have little connection to the island) at great cost.
We need an open debate about university funding.
We need to understand that “retail” is never going to be the industry it was and that the locally born low-skilled, low-paid workers it employed need to be retrained to provide services that are currently carried out by economic migrants. It is madness to pay redundancy money to Woolworths staff while the potatoes are being picked by nearly arrived migrants.
We need to ensure that we remain an attractive location for wealthy people seeking to relocate.
And we also need to remember that although this crisis is, in financial terms, the worst the Island has faced for many generations, we are in a far, far better position than many other jurisdictions.
And yes, raising GST to 15% but ensuring there is no double charging of VAT and GST is the nuclear option, if we need it.
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One more point. Jersey is not unique in this.
The whole western world has been living beyond its means for a couple of generations. What we all have to accept is a lowering of our standard of living. It will be painful. Simple as that.
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It would be most useful if the states were to publish the key facts from the economic advice, e.g. identifcation of each component of govt spending, the estimated cost and the underlying assumptions. This would increase transparency and perhaps lend to some input from the general public on how spending and the forecast deficit can be minimised. Any public opinion now results from a lack of information.
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Pragmatist, I like your comment and tend to agree with it on the basis it would be carried out like you say. However, there is a flaw/problem, and that is the states of Jersey would welcome the higher GST but I would bet my life on it they would not reduce Income tax they would just rub their hands together thinking of all the garbage their departments can waste it on.
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Pragmatist Fine arguement but you must take into account the retail/cost prices of Jersey and elsewhere before tax is levied food, clothing, housing much higher in Jersey before taxation cost of living in Jersey much higher travel more expensive the list goes on Jersey has priced itself out of the market Even with 17.5% VAT in England food is still cheaper than here in Jersey
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If the States was a private company it would have gone bankrupt years ago!
In difficult times when there is little/no chance of increasing income, private companies have no option other than to reduce their costs & outgoings.
Having been on the receiving end of many an inefficient States practises and processes and witnessed countless questionable schemes and projects, there is dire need for reform from within the States before considering increasing any taxes. As a tax payer, I help to pay the States wage bill and as such expect to receive value for my money and feel aggrieved when I see my hard-earned cash being squandered.
That said, I do acknowledge that any large scale review would inevitably result in redundancies. This might explain why the States haven’t yet taken this route but making difficult decisions cannot be put off forever.
I wait with in trepidation to see the States solution…
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Marcus – 24
It’s not a question of what there is to come back to, its a question of the point of wasting thousands of taxpayers money on students that bring no benefit to the island. The States seem so set on keeping the finance industry they could just fund business and finance degrees.
Adrian – 12
If the elderly are living longer then they should be expeced to work longer. Or is the working age going to be fixed for eternity? (not viable)
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#19 SJL: ‘I am under the impression that the 0/10 policy was introduced so Jersey would become more competitive and more attractive for multi billion dollar corporations/companies’
Zero/ten was introduced at the insistence of the EU, which doesn’t like jurisdictions taxing companies differently based on where they do business.
Jersey has for many years had the exempt company regime, whereby companies that generate their income from non-Jersey sources are taxed at 0 per cent. Unfortunately, in order to keep this arrangement and keep the EU happy, Jersey had to extend the 0 per cent rate to local trading companies.
‘I have lived in this once beautiful Island all my life and watched as the greed and the foul stench of money has slowly corroded it to what it has become today (money black holes and all).’
Presumably any list of things Jersey has become today will include an excellent hospital, excellent schools and excellent public services? Sometimes money can smell good.
#23 Pragmatist
Very interesting post. Rightly or wrongly, there is some talk of this happening.
I agree that the least well off need to be protected but I’m not sure tax credits are the way to do it. Consumers would have to keep receipts for everything they buy and the tax office would have to check these before issuing a rebate. It would be a nightmare for taypayers and for administrators.
Also, the experience of tax credits in the UK is that many people, often the poorest and most vulnerable, don’t claim them. This is a real danger when the onus shifts from the state providing something to the individual claiming it.
Finally, income is much easier to predict than consumption. Forecasting tax revenues would therefore become more difficult as Jersey moved away from income tax.
#24 Marcus: ‘stop funding for uni students who don’t return? how can they return most specialist jobs have gone to uk immigrants’
Doesn’t the Regulation of Undertakings law prevent this?
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Im getting sick of all this bad news all the time. Im seriously considering just leaving the island. Especially if it the means average law abiding Joe Public, like me, who works to be able to live a comfortable life and pays his taxes, tries to save and make a life for himself etc etc, has to start forking out even more for c*ck-ups made by the people who wouldnt give you the time of day if you said hello to them in the streets, the people who dont really care how it affects Joe Public because their salaries are so big the end result wont really effect them, their lives will remain cushy. So long as all of the average people pull their weight, the states members will be fine because its up to us to fork them out. Prices are high enough for EVERYTHING, let alone a raise in GST. Im a very unhappy person all because everything is directed towards the fat cats in the finance industry.
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Don’t worry, these are the folks who found a £5.5 million variance in the 2008 accounts and then gave it away! World class?.
My opinion (9) hit the nail on it head.
No worry it is really the MEERKATS who run the treasury and they have told Terry that will all be OK.
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Yet again another fine mess our states have got us into and another fine mess we will have to pay there way out of!!
Do none of them have a brain between them?
Adding and substraction is something we were all taught throughout our educational lives! mind some of our states members obviously spent more time skiving being rebelious teens than being in school by the looks of things!!
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I qualified at great expense to the taxpayer, going to three universities!
When I returned, i found that preference is always given to people for England. There is a glass ceiling for the locals. The regulation of undertakings people grant “block exemptions” to large firms, who then take the mickey out of the locals. I have never come across a j category who trains a local person as he or she is supposed to.I have also seen, may times, a jcategry brought in to do a particular job and then move into a position which could have filled locally. Everyone knows that it happens. That is why students often stay away.
I left my profession.
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I have to agree with Bella no 16, Mistershifter no 17, Marcus no 24, Sean no 25,Julie no 27, Brett no 28 and M.E no 30.
Mad Foetus no 33. We have already had a lowering of our standard of living.
Jersey is my home I was born here my family on both sides including great grandparents are Jersey born, my grandmother now departed many years told me when I was a young child that Jersey in the future would only be a place for the rich. What foresight looks like she was right.
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mad foetus there is no way I’m working till I’m 70 I’ll leave that for those that want a 24/7 capitalistic greed fueled society. I believe in a life outside of work unlike many others who cannot see a life outside of their jobs.
As per changing pensions to mickey mouse ones, what use will this be for anyone who wishes to take it easy in their twilight years, unlike the rich many of whom will have had a life time of enjoyment already before they retire?
Jersey is going down the tubes because of the Anglo-Amercian consumer fueled, debt ladden, greedy must have it yesterday society which has been creeping into The island, like a cancer for the last 20-30 years. There is only one way to deal with cancer and that is to get rid before it kills the patient.
James Deale as per living longer this isn’t the whole picture. I would have no qualms working longer if we could go back to the leisurely days of the 1970’s. Most of the rubbish that passes for work now is only good for one thing, an early grave, unless you don’t take it seriously and take it as a joke.
Anyway I was assured that when I was 50 I would be retired as everything would be marvellous in the 21st century, due to work becoming easier and computers doing most of it. Yet more lies from the old guard to placate the young of the time to accepting the status quo.
Michael Neale I have to differ over the hospital. I think I have a better chance of staying alive by staying out of it, what with MRSA and other issues.
Excellent schools? I wonder why I had to send my children to private schools over here?
Excellent public services? Is this why I can never get a bus to my home as they never run a service within a mile of my house even in summer? Is this why the roads are in such a bad state of repair that they patch the patches now? Is this why I am still not on mains water or sewage in the 21st century as are nearly 1 in 6 of the population, unlike the UK which is at 95%, as opposed to Jersey around 85%? Environment what environment? Is this why we have a user pays policy for most things now unlike the good old days when public services were free? Just think I have to pay along with up to 1 in 6 of residents over here to get rid of my effluent because they can’t be bothered to connect me to the mains. However those with no hassle get free removal via the mains pipes. Is this fair in the 21st century? Is this right to have the environment being degraded by all this effluent seeping into the ground and probably the water table and water supplies over here?
On top of this they want to bring in more people from outside to further degrade what is left of Jersey! Has no one any common sense anymore?
As per the RoU does it stop the influx of J-cats and 1.1k’s which further exasibate everything over here?
Jersey is in a mess and by God if things don’t change soon the majority are in big trouble. Luckily certain groups will be able to pack their bags and move on to the next place to be exploited when this island goes down the tubes. The rest however especially the “true” islanders will be left with no place to go as they are outside of the EU unlike the rest here who can always go back home.
What happens when other jurisdictions begin to pay people to bring business in, does Jersey follow suit? This rush to the bottom of the pit will not benefit the majority, who will be left to shoulder an ever increasing tax burden as the rich and big business have an increasingly easier ride over here. Is this what the majority wants? I don’t think so.
Yes we live in interesting times! I am sure the way things are deteriorating around the world that 2012 might come as a blessed relief for many.
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#39, Michael Neale
I am not sure which hospital in Jersey is the “excellent” one.
There have, however, been excellent public services and schools (I went to four of them) and reasonably good hospitals since long before the finance industry came to prominence.
This is not the first time that posters on this forum have stated that we owe all this to their favourite industry.
To suggest that all the good things in the island are down to the finance industry is an insult to the memory recall of those who have been around a little longer.
The truth is that because Jersey is a pleasant place in which to live it has always attracted wealth and so has never known hardship except during the occupation.
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Interestingly in the latest edition of the Evening Post Phillip Ozouf states that he is going to try and cut the deficit by making savings.
As the deficit represents roughly 10% of the total States budget I think this is highly unlikely.
Certain departments such as Health would find it hard to make cuts without cutting services although some savings could probably be made around the edges.
So there would have to be an effective pay freeze and maybe deep cuts in staffing levels in other departments.
I can’t see him getting this kind of policy through the CoM, let alone getting it through the States.
As I said above, Jersey has a system of government constructed more for the convenience of the elected members and the civil servants that work in it than the electorate or the tax payers.
We are all going to pay for it as they thrash around in this muddle of their own making and eventually taxes will go up even if the end result is to destroy the island’s long term economic viability.
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There is one offshore jurisdiction that seems to have got it right – the Isle of Man – retained low cost living, retained lower personal taxes, retained realistic property prices – and what a fantatsic quality of life – okay it does a rain a bit but best move I ever made.
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“Here in the islands we’ve had it too good for too long. Paying GST even at 17.5% would still leave us with an incredibly attractive personal tax regime IF we protect the lower paid from its impact. Its not that difficult to achieve.”
Whilst we have a Chief Minister who believes its “immoral” to tax high earners, backed by a government who collectively fail to even raise an eyebrow to that attitude, your incredibly simple idea is an impossibilty.
This island is now run by the rich for the rich. That’s the flaw in your plan.
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What a mess we are getting into, figures changing all the time.
Ozouf is not qualified to make judgements or decisions about the islands finances.
This man has no experience in the finance industry and has no professional qualifications.
In the private sector he would struggle to hold a position in the finance industry, and yet the professionals in his department are expected to take orders and support someone who is clueless, and we as taxpayers are expected to trust him to secure our future!
I think we need to get a grip of who we appoint to these key positions.
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“my grandmother now departed many years told me when I was a young child that Jersey in the future would only be a place for the rich”
That is total nonsense. The truth of the matter is that pretty much everywhere is only for the rich these days. Certainly Britain is all much the same – there are a small number who are loaded and a majority who scrimp and save.
But at least in Jersey the beaches and cliffpaths are free.
Everyone should just face up to reality. As Brett says above, this isn’t a black hole, just a statement that in the next few years we are going to spend more than we bring in unless something changes.
So we spend less. It isn’t complicated. We have about the highest level of public spending on social services in Europe. We have manual workers getting paid much more for the States than they would in the private sector. We have ridiculous pension schemes for States workers.
Just do it.
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People? Isn’t it about time we all took to the streets to protest about the shambolic and humiliating way these ministers are governing the beautiful island of Jersey. Take a leaf out of our french neighbour’s book?
We can all gripe and threaten to leave the island but where does that get us all?
The states and indeed the whole island would not survive without the work and co-operation of the populace.
If you want an end to this ongoing disgrace then we must all act…..
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Is it any wonder so many people want to work in the public sector if you are the average person in the private sector mad foetus?
By the way your first two paragraphs contradict each other!
Are you suggesting people take residency up on the cliff paths and beaches there foetus? If you are, it is the best idea you have come up with to date. Maybe some cardboard box cities on the sand dunes? This should cut down on high rents shouldn’t it? Maybe people would be able to have a life if they did this and some spare money in their pockets at the end of the week?
Yes in my honest opinion you are indeed correct in that things are only going to get worse with the likes of Ozouf and co. What has Ozouf actually done in the private sector? If I remember correctly he has been to somewhere like Kenya to count coffee beans?
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“This man has no experience in the finance industry and has no professional qualifications.”
It is unfair to say that Phillip Ozouf is unqualified and lacks experience.
He is a trained cost and management accountant (ACMA) with experience.
On paper he has more qualifications than the average person working in the finance industry!
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As an ACMA Phillip Ozouf is also more qualified than the majority of ‘professionals’ in his department.
But this is the States we are talking about
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Earlier I suggested plugging the tax defecit by legalising drugs.
There’s a few estimates here, but I suspect there are at least 5,000 (and probably more) drug users on the Island. From the heroin addict spending several hundreds a week to the occasional spliffer spending maybe £50 a month there is a wide range of expenditure, but lets say the average is £50 a week. Do the maths – its a business worth – conservatively around £12m a year.
Lets legalise it and tax it – drugs cost next to nothing at source so we could probably get £10m in tax alone, without affecting the ordinary tax payer. And we would eradicate the criminal gangs who profit off drugs.
We would save banging up couriers and dealers. How many of those are in la Moye? 200 or so, at an average cost to the taxpayer of say £75,000 a year (thats an estimate but less than the UK figure, which I do know). Release that lot.
So straightaway we would have a tax saving of £25m. We would save police and customs resources. We wouldn’t need to build a new prison wing. We would reduce the incidence of people dying because of poor quality/over strength drugs. Would it make any difference to the amount of drugs being taken? Probably not.
As a parent, I don’t want my kids to take drugs. But if they do, I want them to come through the experience unscathed, and be able to put it down as a (pointless and with hindsight, dangerous) experience. The biggest risks are getting sucked into a drug culture, accidentally overdosing or getting caught by the police. If the product is legalised, these risks are much reduced.
And half of our black hole is plugged – possibly more than that.
How about we think outside the box?
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A good start would be when people register with ITIS, get their potential earnings from their employer, don’t let them guess it themselves!
Some people have come here for seasonal work, guessed their own earnings (funnily enough guessed them so they get given 0-1% ITIS rate) then left at the end of the season and as long as they don’t come back they get away with it.
It might not be much but it’s an extremely easy loophole to close and will bring in some more revenue.
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Oh yeah, and paying ‘consultants’ from the UK to tell people stuff they already know! How much money gets wasted on this rubbish?
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Mad Foetus, for once we totally agree.
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#43 Father Ted
While I’ve no doubt this doesn’t apply to you, my perception as a local who lived in the UK for nearly a decade is that there is a lot of complacency in the local job market. Many locals feel the world owes them a living and that they should be employed in preference to their better qualified, more experienced and harder working non-Jersey colleagues. I think most non-Jersey people and many locals would recognise this attitude.
Most firms would prefer to employ locals – for one thing, they are easier to retain – but employ non-Jersey staff for this reason. It is easier to create imaginary glass ceilings than for people to correct personal weaknesses.
#45 Adrian
As someone who worked in the NHS for four years, Jersey’s hospital is much, much better than the average UK hospital. Re schools and public services, having lived in the UK these are also much better. Talking specifically about bus services, there was a letter in last night’s (paper) JEP from a couple in Durham praising Jersey’s bus service.
Re your house, while I sympathise it sounds like you live in the middle of nowhere. If this is the case, surely your needs must be balanced against the undoubtedly prohibitive cost of connecting you to services. My parents live in a house with a septic tank and, until recently, a bore hole and a lower purchase price of the property reflected the additional expense of emptying the tank. Finally, if sewage is seeping out of your septic tank I suggest you replace it.
‘Is this why we have a user pays policy for most things now unlike the good old days when public services were free?’
Can you give me a few examples?
Regulation of Undertakings insists that J cats are only awarded where the job cannot done by a local. As above, most are unfortunately necessary. 1(1)(k)s we’ve discussed before.
‘What happens when other jurisdictions begin to pay people to bring business in’
I don’t understand what this refers to.
#46: Rozel Aubin
As above, Jersey’s hospital is much, much better than the average UK hospital.
While I don’t doubt Jersey was a pleasant place to live in the past, the hospital in the early eighties was nowhere near as good and offered nowhere near the range of specialist services it does now. Re schools, think about how many nineteenth century schools have been rebuilt or extended since finance came along.
‘The only thing responsible for the good old days is a bad memory.’
Far from being an unquestioning advocate of the finance industry, I recognise that relying on finance is far from perfect and it does create problems. I just think an acknowledgement of the many benefits finance brings is also required.
#48: J Alternative
My understanding is that the IoM is actually facing an enormous black hole due to the recent VAT changes.
#49: Stephanie
I believe what he actually said was that it was immoral to break historical tax agreements with 1(1)(k)s.
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#57: Leah Holmes
The default ITIS rate is between 15 and 20 per cent. No one receives anything like a 0 to 1 per cent ITIS rate unless they have made massive overpayments in the past or a local returning to the island who has worked in Jersey prior to 1 January 2006.
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On paper Senator Ozouf is qualified. On paper.
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Mad Foetus #56
Like Leah, for once I am in agreement. However, if this were to happen it would have to be linked to a radical overhaul of our immigration law and policies so as to prevent every drug addict in the world finding themselves on our doorstep!!
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here we go again they waste the money
and we have to pay
gst= goverment support tax
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mad foetus 56
I totally agree, legalising drugs means educating the users instead of locking them up.
It would take a very brave politician to suggest let alone fight for such a change in policy though.
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Well Senator Ozouf only just got in last time, we have to make sure that we don’t vote for him again, And the same with all of them that voted to keep GST ON FOOD.AT least in three years we get rid of Le Sueur , at last.
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Jersey people are routinely discriminated against in their own island.
The abuse of J category licences should be curbed. There is indeed a glass ceiling so far as many qualified local professionals is concerned. Hopefully, a new anti discrimination law might deal with the given inequality.
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Mr Neal at Number 60; With the greatest of respect, I do not think that any of the commentators on this site owe any justification for their comments to you!
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Michael,if you ran a business would you use cheaper migrant labour, enabling you to maximise profits or pay more for local people? I don’t know about you but £5.85 an hour isn’t exactly a living wage over here is it?
It is for this reason that I think firms prefer non-locals as it boils down to pure economics.
It has often been said before that if you pay peanuts you get monkeys. People aren’t going to bother for paltry wages are they?
As per the hospital there have been problems there they have been widely reported in most of the media as well as Senator Syvret’s blog.
As per the schools I disagree over that, this is why I had to send my children to private school over here. I couldn’t risk them not having a proper education.
As per public transport it is a joke. I have no buses within about a mile of my house not even in summer when the bus service is a bit better than the winter. As I live in Jersey all year round I should have a better idea about this than others who may have spent a week in a town hotel next to the Weighbridge.
As Jersey is 9×5 miles, at it largest extent, do you really categrise anywhere over here as the middle of nowhere? I classify the middle of nowhere as the Outback in Australia where if you fly at night it is possible to fly over land for 1-2 hours and not see one light down below. This is the middle of nowhere. Or when you leave a town in the Outback in you van and the last sign you see says no petrol for 900km. This I would say is a proper definition of the middle of nowhere. I probably live a little over 4 miles as the crow flies from Bellozane. Is this your definition of the middle of nowhere?
It is appalling that in the 21st century in Jersey we only have 85% connected up to the mains sewers. If the States are honest in their green asperations this should be sorted out as soon as possible before they think about allowing in even more people.
An expert I spoke to in the UK a few years ago was amazed when I told him good old Jersey was at 85%. I thought it was good until he laughed and told me the UK was at 95%! He was shocked as he thought Jersey to be awash with money and would have had everyone on ages ago.
As per my needs, surely the environment must come first? I am fully prepared to pay to be connected up just as soon as it is outside my house on the main road. What more can I do? I am awaiting the State to honour their end of the bargain. As you well know you pay for works up to and into the road not up to one mile away. I think it is grossly unfair to expect a private person of modest means to have to pay to dig up 1 mile of road don’t you? Maybe if I was rich I could afford it?
I can assure you house prices aren’t reflected by mains services, sea views trump these every time. I have never heard an estate agent reduce a house price because it didn’t have mains water of sewers.
As you well know septic tanks trap the solids and allow the watery bits to go into a soakaway. The soakaway allows this polluted water to basically soak away into the ground and the water table eventually. This is how they work.
Tight tanks keep all the waste and have to be emptied almost weekly. I could spend maybe £20,000 to change over to one and end up paying more to empty it, as it would need emptying more often. Is this fair to expect me to do this when I could be connected to the mains for less? I don’t have money to burn, the States did till a few years ago, they should have sorted it out then shouldn’t they?
Do you think it is right that the user, as in the person with no mains sewerage connection, pays to empty their tanks whilst the rest with a better grade of service get their waste removed for nothing?
As per the user pays policy, if I remember correctly, this was introduced in the days of Mr.Shenton senior as he thought that the user should pay and not the tax payer.
As per J-cat jobs in say teaching are you sure there aren’t enough locals good enough to teach?
I was talking about 0/10. What happens if other jurisdictions steal a march on say Jersey by going to 0/0? What happens then? The rush to the bottom as I said before could end up with say someone like the Sultan of Brunei for example, deciding that he wants to pay businesses money to set up shop there.
If something like this were to occur money would follow to the lowest common denominator wouldn’t it? Other places would have to match or be as close as possible to stay in the game.
This is without considering bigger countries getting fed up with tax avoidance and deciding to call it a day on low tax areas.
I can assure you 30-40 years ago were much better than now. No stress, no stupidity, no triplicate red tap, a sense of pride in Jersey and its culture. Even the UK was better back then as well. I know I spent some time in it. Now it isn’t a patch on what it was then. As per one simple example there were never armed police on the streets then, there are now.
As per the old 19th century primary schools how come they are still standing? The new schools like La Rocquier only lasted 27 years I think. It has recently be rebuit at huge expense, it needed its old flat roof replaced many, many times in its life time. How long will the latest one last? 100 years do you think?
As per finance it is far from perfect and causes as many problems as it solves. Yes people might be paid more but at what cost? Social problems, over crowding, crime, theft, loss of habitate for wildlife, pollution etc. People are now under much greater stress than before to perform, leading to increased incidences of illness with longer periods of time off work e.g. depression.
Quality of life has taken a nose dive as finance has become the defacto number one job in Jersey for those wanting the good life.
I believe the sooner Jersey gets away from finance the better, as its time could now be coming to an end anyway.
People may view it as immoral to change agreements with 1.1k’s but I also view it as immoral to change my tax regime without my agreement. If the government can bring in GST to change my tax regime for the worse then I think it is only fair to alter other agreements as well, so that others are affected to the same degree. As we all know GST is a regressive tax, as it hits those at the lower ends of the finance spectrum the most. Those at the top end probably won’t even notice it. Not in comparision to 20 means 20 anyway if they are a 1.1k.
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Maybe a better way to tackle the drugs culture would be to make reality better than it is at present? If people didn’t hate the real world so much they may prefer to stay in it, instead of being bombed out of their brains trying to forget it?
People I have known on drugs wouldn’t be using them if they could get by in the real world. Maybe the root causes of drug taking should be investigaed more and solutions sought so that people don’t feel the need for speed?
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54
Qualified maybe, but so are many people on paper.
Please list the positions he has held in the world of finance.
Starting with bookeeper……..
This job really should be given to a highly respected accountant, you know someone that his team can look up to! and us islanders can have confidence in!
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Michael, unfortunately you are wrong with regards ITIS rates.
I was asked (in the application form) what my salary would be and was given 1%, I have chosen to pay more because I don’t doubt that someone somewhere has made a mess of something.
I know others who haave completed the same form and been given a rate of 0-1%
I don’t know where you’re getting your information from but I can assure you this is happening. I’m not going to leave the island but some do at the end of the season, then the States are on the phone asking if you know where they are now cause they owe tax!
**ss up and brewery!
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They have be going on about black holes for years,but dos,nt stop them spending,and making the black hole bigger and bigger.maybe with a bit of luck if they dig it big enough they will all disappear down it
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Phil in 3 years time when the present C.M. goes we will end up with guess who as the Next Chief Minister!!!
If people still vote for him after this they will deserve all they get as far as I am concerned. I myself have no confidence in this person as I believe he will continue to destroy Jersey as we know it. I myself have no faith whatsoever in him.
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“This job really should be given to a highly respected accountant, you know someone that his team can look up to! and us islanders can have confidence in!”
To be eligible for the post of Treasury Minister one first has to be elected as a member of the States of Jersey.
If an accountant wants to put himself forward for election and succeeds then he could stand for election as Treasury Minister.
I think it fair to point out that Terry le Sueur, Phillip Ozouf and Ian Gorst are all qualified accountants and Terry le Sueur and Ian Gorst spent many years in private practice.
It is also fair to point out that GST, the growing structural deficit, and the failure to hedge the incinerator project all happened on Terry le Sueur’s watch.
Maybe accountants don’t make the best politicians after all!
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I believe that the big O is very similar in outlook to the first chief minister. Well he is in my book. I don’t trust him to do what’s best for the ordinary person over here. That’s my honest opinion on the matter.
He will take credit for any positives but he doesn’t appear as willing when there are black marks being awarded. It appears that he prefers others to get these. This is my own observation on things.
As per three years time what happens when he gets the top job? I really fear for the future of Jersey.
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Listen to the frustration on these posts….then go to http://www.tpuc.org/node/107 and see any comparisons.
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re 77 truth seeker – thanks for posting that website I’ve never laughed so hard at such nonense on a website.
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Pip
I agree Terry & Ian do have qualifications and I respect these guys because they do have a track record in Finance.
Hey but Phil – what’s he done, nobody can answer this one.
And other flaw, yes we do elect people to the states, but sadly not to the positions. you just put your name forward for ministerial posts and if your face fits you get voted in.
Yes all very admirable, but sadly we ain’t got the right people running the island.
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#78 Steve,I agree.
I’m sure quite a few have had a look by now.
I found it amazing that people can go to so much effort over a hobby horse.
It reminded me of a newsletter that was posted direct from Cheltenham each week to my mother-in-law in Jersey in the early 1970s.
I reckon that one had a bulk posting to Jersey.
The gist of it in those days was how the communists were infiltrating the universities in order to bring about the end of life as we (Right-thinking people)knew it.
As far as M-in-L was concerned everything written in the epistle (which cost her plenty) was incontrovertible. I worked in a university college at the time and whenever I came to Jersey she would ask me if I had been “got at” yet.
Who knows? Perhaps I was!
I’ve developed an interest in black holes since then but I won’t share my findings with the States.
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78 Steve…Fear does that doesn’t it causese nervous laughter….c’os the littany of disasters here could be caused by something else…you tell me..
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Nothing amazes me when it comes to the States anymore…
I could have covered the cost of this blackhole buy fixing the gbp/eur rate for the new incinerator!
Who actually has the responsibilty of making these decisions?? They are clearly not experts dealing with our money and future…
Very concerning!
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#31 Richard Murphy is right to gloat. He prepared a paper for Scrutiny 3 or so years ago that predicted a financial catastrophe for Jersey if it pressed ahead with the 0/10 policy. Basically Jersey would be unable to replace the ca. £100 milliom per annum tax loss from company taxation. This is now coming to fruition, and the effects of any local financial downturn will be additional. Unfortunately although the paper he prepared is referenced in the scrutiny document, the link to it has been removed from the States website.
His quip that his services were free pours scorn on the ca. £200,000 p.a. we are paying for the financial foresight from our fiscal advisers. We’d get the same advice much more cheaply with a subscrition to the Economist.
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father ted(43)good comment,
we must stop importing labour and see that locals move up the ladder.
some of us have been saying this for years.
and nothing happens.
but when we allow the cost of a house to escalate to total stupidy prices.
why would our young people return?
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Dec
In a deep recession the lost corporate tax may not be easily replaced through economic growth but raising an extra £100m would merely requiring raising GST from 3% to 10%. Alternatively Jersey can copy Guernseys strategy of using part of the £600m reserve to absorb the deficit, or perhaps any combination of the two options, while the global economy recovers.
Corporate tax and personal income tax are not the only options available.
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Simple solution take the cap of of social security so all earners on more then £38,000 would pay 6%. How much money would that rake in? Quite a bit I reckon and it would require zero staff to impliment.
Then we could always ask for a bit more form those with the most couldn’t we?
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Mad foetus no 56) That’s what Jerry Dorey tried to do. How long you lived in the Island ???? Obviously not not long enough to know that fact !!!!
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87. well maybe it should be tried again. It has seemed a no brainer to me for years that drugs should be legalised, controlled and taxed. Those who develope problems should be given help not banged up in prison. It is no business of the state to dictate what I can and cannot put in my body.
Heh would even bring back the Tourism industry.
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Jacq,
I’m a bean but was prolly at university or (whisper it) working in the big smoke when Jerry came up with the idea.
He was a good politician. He actually read the laws that the States passed.
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I think Cohen has his sights set on being Chief Minister when its next up so Ozouf may not get in (either one is a terrible prospect in my opinion)
Adrian , you keep on about taxing people more and you moan that locals won’t work for the minimum wage, can I suggest that £38k may be a lot more than those on the minimum wage would earn, so if we are going to tax more lets drop the threshold to £20k! still way above th epoor farm workers or a lot of those in hotels etc!
David Brown, what labour shall we stop importing? doctors and nurses, farm workers and Hospitality, you can’t pick and choose as I have said before, can I suggest you go through a day without needing a non local worker, guess what you can’t do it!
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Gary
From what I hear, Cohen isn’t interested in the big job. Shenton might be but he’s tarnished his copybook by trying to get compensation for a couple of people that he feels got a bad court decision. If a Chief Minister tried to intervene on a case by case basis it would quickly end in tears and allegations.
Ozouf looks like the only contender at the moment. On the plus side, he works very hard, he is not unintelligent, he is not in my opinion someone who could be corrupted and he is much better at building consensus than he used to be. But there are negatives and they are well known.
The curveball would be if someone stood for Senator in 2011 in the style of Ian Le Marquand but with more ambition and dynamism. Then we could get an entirely unexpected Chief Minister. If enough people ask me to stand (and more than one States member already has) I could do it.
But what should be clear to everyone is that globally politics has changed, and the role of the politician is no longer to spend money on initiatives, but to reduce public spending and increase taxation in the most sustainable way. Which is a challenge that needs pragmatists, rather than idealists.
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Typical insular whinging from a lot of people – all sounds like a Daily Mail headline. Take a look at what is happening beyond our shores – the UK is a good place to start; check their financial deficits and Jersey’s will look like a place where the government has lost 50p down the back of the sofa. The UK tax payer has to pay £35 billion per year just to cover the annual interest rate on its £1.3 trillion borrowings. Jersey has never borrowed a penny.
All this borrowing distorts current tax rates in these countries by keeping them artificially low. Despite the average UK income tax payer paying around 30% (and I don’t mean 30% less allowance or relief like you get in Jersey, I mean 30p for every £1 you earn) real rates of tax would need to be much higher to cope with current borrowing levels. In fact it has been reported by some experts that the UK people face a ‘tax bombshell’ to cope.
Jersey ends up with a small surplus every year. Most of the rest of the world runs a large deficit every year and has done so for many years (hence the massive debt they’ve rung up).
Jersey has £600 million in liquid reserves meaning it could pay for itself for a year without any income. Don’t know what the UK’s is but it’s no where near as healthy with all that debt it would have to pay back first!
Jersey’s fiscal structure is incredibly simple. The Uk’s is a mess of public and private borrowing so complicated the chancellor has to stick his finger in the air to guess how much tax to levy and hope the deficit isn’t already massively bigger than predicted. Most governments would give the right arms of all their people to be in the position Jersey currently is.
I’m not saying Jersey hasn’t squandered, and £60 million isn’t great but we’ve had it so good for so long that the fact that any deficit is forecast makes the news. It’s also a forecast and if anyone has been paying attention recently, every year a deficit is forecast and every year a surplus is realised. No doubt the usual wingers will say I have my head in the sand. Well my head is held high – you are the ones with your head down moaning like it is the end of the world.
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Mad Foetus, I have heard that Cohen is after it so we will have to wait and see on that front. I have dealt with Ozouf several years ago, he will not stand for anything unpopular and is not strong enough to be a Chief Minister as I don’t think he will have what it takes when those difficult decisions need to be made.
Frank Walker wasn’t worried about his popularity and introduced many unpopular things but I believe that he did them with the good of the Island in mind, I don’t think Terry is a good CM particularily but hes probably the best of a bad bunch, i fear for the future!
I agree the worls is a lot different now to what it was 6 months ago and strong leadership is required, but alas I do not know where it is going to come from
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gary,maybe we cant pick and choose, but we could embark on a program to train our young people for top /middle jobs as seasonal work is only a stop gap and will not see you thru the winter.
in todays toil i worked with my local mate, the lorry driver who delivered the goods was a local chap. all the people who administered our work have full qualifications.
not ill so i dont have to see my local doctor.
fortunatly didnt need the hospital or a dentist.
so i did get thru today without imported labour. tommorows another day.
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David Brown, having local qualifications doesn’t mean you are from Jersey. I am sure we have many J cats and “K”s that are now locally qualified but I think what is being said above is referring to local people by birth not by licence or eventual qualification.
You did well, i assume you didn’t shop, get petrol, etc etc but youget the idea I was coming from!
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