IN the USA it might have been called a state of the nation speech. Here it was an address at yesterday’s Chamber of Commerce lunch by Treasury Minister Philip Ozouf.

This comparison is by no means as absurd as it might sound. In an impressive political performance, Senator Ozouf took his influential audience of businessmen and women through the present condition of the Jersey economy and onwards into his vision of a future which, he is confident, can be prosperous and congenial if the right steps are taken without delay.

To his credit, the minister was also honest about the pain, as well as happier circumstances, that lies ahead. He spoke candidly of public sector job cuts, redundancy schemes, recruitment freezes, curbs on States spending and the distinct possibility of tax increases.
All this, he said, had to be part of the picture if the Island was going to cope with deficits estimated to amount to £64 million this year, £72 million in 2011 and £53 million in 2012.

This austere message appeared to strike a chord with the audience – in all probability because many of those present will already have been fully aware of the challenges that lie ahead.

But in spite of the difficulties he outlined, the Senator also delivered an upbeat assessment of the underlying strength of the Jersey economy. He pointed out that if our core situation were the same as the UK’s, he would be talking not of deficits measured in tens of millions but a £600 million black hole from which it would be infinitely more difficult to escape.

In addition, he explained that money in the Stabilisation Fund was available to address some of our problems and added that, so far, further resources in the Strategic Reserve had not been touched.

Given that a contingency remains, it is fair to conclude that the famous ‘rainy day’ for which cash has been set aside has not yet arrived. The combination of the global recession, tax restructuring and, to a degree, public sector profligacy mean that times are tough, but we are not in crisis.

That said, anyone reading between the lines of Senator Ozouf’s speech – as well as noting what he explicitly said – will realise that the general public as well as those in public employment are going to feel the pinch in the next few years. For example, it is a fair bet that unless a very substantial rabbit is pulled out of the hat, we can all look forward to paying more GST in the not-too-distant future.