YOU would think that someone who doesn’t believe deep cuts in States spending are necessary would welcome the news that the unions have got together to oppose them. Well I don’t. It just confuses an already confused issue.

The interminable row over States spending is not about protecting jobs for civil servants and manual workers, although some people might consider that important. It’s not even about improving efficiency in the public sector because the fact that cuts have to be made proves there’s not much fat.

What it’s really about is providing health, education, welfare, security, public infrastructure, public transport and a host of other services members of the public want and in many cases desperately need. Before we had public services, we had the very rich who could look after themselves – thanks very much – and we had the poor who did without.

While there are a privileged few who would like to go back to those good old days, most of us accept that taxpayers have to foot the bill to ensure everyone has a better life.

That is why we have public services, after all, even if some seem to believe it’s all a socialist plot to deprive them of their hard earned cash so that it can be wasted by a careless and profligate government.

So you can see I tend to approach the issue from a slightly different angle. I don’t believe it’s a question of what we can afford. I believe it’s a question of what we should be able to afford.
In other words, what kind of public service should we be providing the residents of Jersey at taxpayers’ expense, not how much can we afford to provide.

That’s frankly as fundamental a question as how we are going to grow the economy and create wealth. After all, what’s the point in creating wealth, if only a few benefit from it? Is it just so a few individuals can make more money to buy a bigger house or a car? Or is it so that everyone, ie the ‘public’ as in public services, can benefit?

As I can hear all of the entrepreneurs in the island spluttering into their gin and tonics and muttering something like ‘blasted pinko’, I should make it clear that I’m not against private wealth or people getting rich from a growing economy.

Far from it – I think we should be spending more to ensure that the economy does grow, and I welcome the creation of private wealth, even if only because it should mean there is more money to devote to those public services I also consider important.

What I’m trying to do is step back from the arguments about who will suffer from the closure of a hydrotherapy pool or whether we need lifeguards at Havre des Pas or not. States Members will no doubt spend hours on that when they come to debate it.

What I’m trying to do is look at the big picture, which is something you can’t expect from most of our States Members, who are too busy getting onto bandwagons and pretending they know what they’re talking about.

The question that needs to be answered is what level and quality of public services can an island the size and with the wealth of Jersey expect to provide their citizens. It shouldn’t be too difficult a question to answer. All it requires is a serious benchmarking exercise so that we know whether our public service matches, exceeds or even falls short of what similar jurisdictions provide.

Once you have answered that fundamental question, then you can argue about how those services are to be provided and paid for. It might even be that the quality of public services in Jersey is higher than comparable jurisdictions, in which case cuts are justified. On the other hand it might show that we’re not as well off as we think we are, so there would be a strong case for spending more.

That might mean more taxes because we have to face facts. The financial Golden Goose is unable any longer to lay the same number of golden eggs, so if we want public services, taxpayers have got to pay for them.

Unfortunately my critics will say that puts me firmly into the ‘tax and spend’ camp, which is pretty close to being called a heretic in Jersey. However I certainly don’t want to pay more taxes than I have to, but I don’t believe that what I’m forced to pay is wasted either. Once again it’s all a question of balance.

Taxation is not the problem in this grand debate about States spending and deficits. It’s excessive taxation that could be the problem, so I would wish that all those who are constantly bleating on about the poor, long suffering Jersey taxpayer would look at other jurisdictions to see what real suffering is.

Similarly, it’s not States spending we have to worry about – it’s excessive spending, but none of the existing benchmarks suggest our spending is excessive compared to other jurisdictions.

However, I would also have to admit that it’s not cuts in States spending that’s the problem either – it’s excessive cuts. Whether the cuts proposed by the Council of Ministers are excessive or not is a matter of opinion, in the absence of any evidence about what level of public services we should be aiming for.

The COM would argue that we can’t afford what we’ve got now, so we have to live within our means. That obviously strikes a chord with anyone watching what’s happening in the UK with the introduction of a severe austerity package because the government wants the UK ‘to live within its means’.

If Jersey had such a huge deficit, owed so much money, had such high taxes and had so many people out of work, then perhaps some austerity might be justified in the Island too. But even on the Treasury Minister’s own admission, Jersey’s problems are nowhere near as severe as the UK’s or just about anywhere else.

Indeed there’s all this fuss and we don’t even know one of the most important numbers in the equation. We don’t know whether the EU will force us to replace zero corporate taxation with 10 per cent, which could have a significant impact on the budget figures.

In the meantime we have an immediate budget problem to deal with and although the Treasury Minister has described the threatened budget deficit as ‘minute’ compared to other jurisdictions, it has to be dealt with.

So while we can’t describe the first round of proposed budget cuts as ‘austerity’ measures, they will certainly impact on many people and by the time we get round to the third year of cuts it will certainly begin to look like austerity.

Some will believe our financial problems are so severe that this is what’s required, while others will think we’re panicking just because there is the prospect of some red ink in the figures, which in recent global conditions is hardly surprising.

So, yes, we should certainly put a cap on future spending. Perhaps we should even make some cuts by changing the way the public sector operates, but phase this over five years, not three, to give it time to work properly.

We should even raise GST to 5% if necessary – most of our competitors will still not believe how low it is.

We can even borrow a modest amount, as exceptional circumstances sometimes require exceptional remedies.

But don’t let’s damage services provided to the public of the Island, perhaps irreparably.

Peter Body is editor of Business Brief magazine.