From Roy Travert.
IT was with great concern that I read the JEP of 12 December with regards the massive pension debts that Jersey now faces.

I must congratulate Senator Shenton for doing the morally right thing and bringing this very serious issue to the States Chamber for debate. It is essential that the public have this information to make an informed opinion on what is, in effect, a public debt.

As chairman of the Public Accounts Committee, he has tried, unsuccessfully, to convince the rest of the States Members that Jersey should not have a pension debt of £222 million and should pay this debt off as soon as possible. I fully agree with this view.

This debt is in respect of public sector workers’ pensions, which he wished to repay over the next 20 years rather than the present policy of 82 years. This was to be achieved by paying money from the States general reserves. Question: Who do we owe this money too? Which bank?

From what I could understand from the JEP article, half of this amount is also owed on the teacher’s pension fund. With this debt expected to rise as people live longer and take more money out of the pot, it is the taxpayer who will once again shoulder the cost of the States financial mismanagement over the past 20 years?

As Senator Shenton’s occupation is an investment manager, I regard his judgment on this matter very highly and take his views very seriously. The States knew of this deficit in the pension fund as far back as 1987 and accepted the pre-1987 responsibility for it several years ago.

The liability for any subsequent debt will have to be met by either increased contributions by current workers, or claimants receiving less benefit out of it, or both.

I fully agree with the view that this is a moral, as well as financial issue, and our present government needs to live within its means and not pass on a substantial debt to the next generation, which is what is happening now.

The news of this massive debt has come as a huge shock to most people. For as many years as I can remember, we have always been told not to worry because we have no debt and everything is under control.

Well things couldn’t be further from the truth. It has now become very clear why proposals are being put forward by Deputy Gorst, at Social Security, for an increase in the retirement age and the increased need for a population increase to match the fund deficit.

We are now expected to work longer as another way in which to service this debt. This has been caused by the States’ inability to act on this issue with the resolve that is needed and pay this debt off.

Is Jersey on the verge of bankruptcy? Only time will tell. But the big question is could we cover all our debts if they were called in by the banks, even with our rainy day fund in place?

In a few days’ time, Senator Ozouf will take to the States the budget for 2010. The basis of this budget is increased taxation for the middle class of Jersey, who have been the economic driving force for finance for the past 20 years. It is this section of our now over-taxed community that will bear the brunt of these increases and it will be to the detriment of our society as a whole.

It is refreshing to see the truth put forward by Senator Shenton, instead of political spin and deception from the Treasury Department as to Jersey’s true financial situation. This debt should never have been allowed to escalate in the first place. In the past year we have seen first hand the effects of debt, with the bail out of the UK banking system and the effects it has had on the world economy.

With Dubai being the latest casualty of debt, and the loss of £248 million from our four main funds, will Jersey be next in line for a bail out from the UK government or will Senator Ozouf just print us some more money as he has done up to now?