I will deliver spending cuts before tax increases
Thursday 24th June 2010, 3:00PM BST.
From Senator Philip Ozouf.
I WOULD like to express my support for the concerns voiced by the chairman of Jersey’s Institute of Directors.
I agree that we must re-prioritise the public sector and make sure it is working efficiently before we expect anyone to pay higher taxes. That is the reason why I started work on the Comprehensive Spending Review before asking Islanders for their views on the impact of a number of different tax options.
We need cuts in spending, and firm spending limits for 2012 and 2013, to be agreed as part of the Business Plan debate in September, before any tax changes are discussed during the Budget debate in December. That is the right order in which to do things.
Many businesses and organisations have already had to find far greater cost reductions than the two per cent that has already been identified by ministers. I believe the public sector must be able to find the target of £50 million worth of annual savings.
To achieve this we need to look in detail at how the States provides its services, to question whether or not the public sector should continue to provide them and decide who should pay for them. I am determined that spending should be tackled before tax increases are debated, but I have to be realistic. Our public finances may be in a strong position, but we are facing an ongoing deficit. We have been through the worst worldwide recession since the 1930s and have suffered a drop in income as a result.
At the same time, we need to maintain recent investments in health care, education and children’s services and we must strengthen financial planning.
Spending cuts and economic growth will not be enough to meet this gap between income and expenditure. If we are to continue funding the high quality, essential services Islanders expect, we will need to pay for them and, even after cutting spending, that will mean some increase in taxes. I believe in fairness and that is why I am consulting on tax rises that will affect higher earners as well as GST which I understand affects all Islanders.
I hope this underlines my determination to deliver savings before tax increases. And, even then, appropriately targeting any increases.
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Senator
Do you have the guts to include redundancies in this cost cutting?
Not that anybody enjoys people losing their jobs but the pain appears to be only in the private sector at the moment.
I am sure if you look very hard you will be able to find a department or two that are overstaffed.
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FOOBAR.
“To achieve this we need to look in detail at how the States provides its services, to question whether or not the public sector should continue to provide them and decide who should pay for them.”
So hes not looking at cutting internal costs / waste / un-necessary spending then like all other business have had to, just the “services they deliver”….
How much did the avenue fiasco cost again? New lights – again? What is the TRUE cost to business / public in lost productivity the last 7 months?
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And he and the COM will still not admit that 0-10 simply doesn’t work and the whole subject of taxing companies needs to be revisited. At the end of the day they are still expecting the taxpayer to pay more tax.
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I suggest he read the UK emergency budget – read and learn.
They are cutting huge numbers of civil servants
They are cutting Housing Allowance (rent rebate)
They are cutting benefits
I would suggest taxing the wealthy at 20% like the rest of us
Howabout 20% GST on takeaway food – to cover the cost of obesity and clearing up the rubbish generated?
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The problem is Phil, that coming from a privileged and wealthy background and never having to actually work for a living, has totally blinkered your perception of the real world.
The States spend over half a BILLION pounds a year running Jersey.
Obscene contracts for civil servants who would not be able to survive in the private sector add a year on year burden to the ordinary tax payer.
Welfare costs are increasing and will continue to increase as more people seek assistance from the States. Those truly in need of help fall further into despair as they are unable to play the system like many can.
2 per cent cuts from the States mean nothing and are overshadowed and nullified by yearly pay increases and the true cost of living here.
Lets be honest here and say it …. Corruption is rife in the States. Everyone knows it and has probably had or seen it. It is an exclusive club ( the three M’s ) and anyone not conforming is out. Not like I am defending Syvret.
What about 30 per cent cuts …… most private sector companies are having to do this.
As a beginning ….
- Freeze recruitment apart from essential core services such as health, education and the emergency services.
- A five year plan to reduce staff numbers by natural wastage.
- Expensive States J Cat workers to be thanked thoroughly for their expertise and be given ones years notice to train a locally housed, equally educated person.
- The scrapping of the “sweet shop” accounting system that departments use. ( ie , you get it , you must spend it, mentality). All departments must put in for and be able to justify all outgoing cash flows. Surplus funds are returned to the general pot at the end of the year. Additional budgets must be applied for under special circumstances.
- All States departmental managers to be accountable for errors within their domain. You foul up, you’re fired, just like the private sector.
- Look at and then change the zero ten fiasco which penalises local firms and encourages firms paying no tax locally. One level low cost playing field. Finance houses would be paying huge corporate tax in the UK and Europe. A level playing field of say, 5 per cent, would still make Jersey enormously attractive to outside firms and lower the burden on struggling local companies.
- Increase the social security ceiling.
- 11K residents will have to pay tax at the same rate as everyone else. If they don’t like it, sod off back to England and pay 40 per cent or if you want to pay no tax, go live in Umbongoland or some other regime where you don’t pay tax but don’t have a coppers to look after you, firemen to put out your house fire and a hospital to treat you. The price of living in a civilised society is tax, we must all pay a fair amount.
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Spring Heeled Jack #5
I sincerly hope Phil listens to you.
But I doubt he will!
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Spring Heeled Jack # 5. Excellent narrative of what is going on today.
I am told by a friend in the police, that one Superintendent, who was paid mega, mega bucks, is about to retire and will be replaced by two guys who are currently Chief Inspectors (So before we had one Superintendnet and we now have two of ‘em on mega mega bucks). The two guys who were Chief Inspectors on mega bucks, will be replaced by four Chief Inspectors, all on mega bucks – how is that determination to deliver savings before tax increases?
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@Ivor Brain: this is nothing new – have you not read Parkinson’s Law?
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Spring Heeled Jack for Chief Minister, NOW!
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Why thank you kind Sir.
Vote for me.
Search for the Facebook site called “Love Jersey X” .. and send a friend request.
Smalls steps towards change at first. We can do it.
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Spring Heeled Jack (5) The problem is Phil
Yes go for it Phil if you dare.
Beano (2) look in detail at how the States provides its services,
Yes!
Inefficient bus services, inefficient leisure services (two unused or underused swimming pools), a blotted portfolio of unused or underused property coupled with a massive negative cash flow. In the real world States of Jersey plc would be out of business.
So yes, Spring Heel Jack for Chief Minister
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5 spring heeled Jack…isn’t it amazing how the truth really resonates with folks compared to Lies (spin)the ordinary human instinctively responds to what is actually happening and knows it deep down…we are collectively having the P**s taken out of us and have been having it done for a long time Five..yes 5 layers of management above a nurse at the hospital for example…the catastrophic COM who tell us to pull our belts in another notch and get all affronted and have a strop when we mere peasants have the temerity to cry foul…they’ve got to go and soon or we are going to have serious civil unrest …I can feel it on the streets..you won’t of course if you swan into town after all the pavement Pizzas have been cleared up by said peasants,have private parking and lunch at the Capanina..you will say “can’t see what they’re on about…all seems fine to me…untill a dark figure approaches as you go back to your car..I have lived where that happens it is neither pleasant or reversible.Wake up now.
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SHJ – you have my vote too.
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Why is it at a time we are told they need to find £50m, Housing seem to have gone nuts spending on refirbishment projects all over town which must have needed to be done for some time, and most of them have gone ahead without the tennants knowing anything in advance. If they could wait until now why not wait until there is more money available.
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The answer is simple Senator Ozouf, you just need to use lateral thinking.
All Chief Executives from 1st January 2011 have to reduce their budgets by 25% and staff by 10% there will be a cost for redundancies, to be determined. In doing so they must maintain all public services to a high and satisfactory level. An external monitoring system will be put in place.
They will only be allowed to work three days a week ( hence proper delegation) although calls to the golf course are allowed within reason.
Any chief executive ( as with most of the private sector ) who cannot come up with the reduction, will be released to further their career elsewhere.
Those that succeed will get 5% of the amount they have saved the public purse as a one off bonus.
The thinking behind this solution is that chief executives should know who is efficient and hard working within their department also who could be deemed deadwood. They should also be familiar with all aspects of spending by their departments and very quickly realise which spending can be reduced.
It would also encourage sharing of resources with other departments, i.e. equipment, video conferencing ( saving on expensive jollies ) human resources could also be shared, the list goes on.To end, who better to make cuts, its the chief executives job to be efficient, and politicians to make sure they are efficient not do the work for them.
Davey.
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Mac # 8. Parkinson’s Law eh? Now it makes sense.
See: – http://en.wikipedia.org/wiki/Parkinson‘s_Law
Let’s hope the States Personnel Department, or whoever approves these appointments puts a stop to this nonsense as it will cost loads of money.
Thanks Mac. The day hasn’t been wasted as I’ve learnt something new.
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How could we have Spring Heel Jack for Chief Minister? It’s clear from his clarity and creative thinking that he’s NOT a serving States member and with that type of thinking, he never will be.
But I do want to throw the gauntlet down and say come on Jack, step up to the plate and help bring about the “regime change” the island needs.
It’s not about love the finance industry and be with the Establishment party: Hate the finance industry and be pilloried for belonging to the looney left.
Jersey (and Guernsey) can survive and thrive with honest people in charge and the finance sector behaving as part of the community, not a dark entity without any accountability.
Remember, all that is needed for evil to flourish is for good men to do nothing.
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Easy peasy….
1. All public sector employees earning over £150,000 p.a. take a 10% pay cut with immediate effect and those earning over £200,000 p.a. take a 15% pay cut.
2. Introduce a new tax threshold of 30% for all those earning over £100,000 p.a.
3 Abolish double taxation by deducting social security contributions paid prior to calculating tax payable (as is the case in most, if not all other European jurisdictions)
4. Introduce Inheritance Tax at (say) 15% for all assets totalling £500,000 and above (as at today’s market value and raising in line with annual cost of living increases). This amount should be calculated to include all movable and immovable assets (including all property(ies), boats and personal belongings valued at (say) £500+; jewellery etc.,)
5. Abolish free parking and free lunches for all States employees with immediate affect.
6. Abolish 0/10 taxation and reintroduce the old system which worked well. This would also take away the unnecessary burdens incurred on small businesses.
7. Abolish GST. This tax affects only the low and middle earners who can ill afford to pay any additional taxes. It has also proved to be an administrative disaster for small businesses with many having to close. It has also resulted in having to employ additional staff within the States.
8. Disclose the amount of income received from GST during the first twelve month period and disclose all costs in the same period (including IT, employee’s salaries and all other costs relating to GST).
9. Make all States members accountable to the public (pound for pound) of exactly where funds are being spent and on what basis permissions are given.
10. Add into the job descriptions of heads of departments that they accept responsibility for that department.
11. Immediate removal of those responsible for blunders made by States departments (i.e. the Euro exchange rate resulting in costing the tax payer thousands of pounds on the purchase of the new incinerator which is also surplus to requirements and as such, will result in further unnecessary running costs to be borne by tax payer.).
12. Possible reform on taxes payable by local businesses. A (say) 1.5% tax payable on the turnover of business as opposed to current legislation, would not only result in saving local businesses currently in crisis, but would also reduce the amount of employees required in the tax department.
13. Consider increasing duty payable on boat fuel to fall in line with that paid for motor fuel. Privately owned boats (excluding fishing boats) should be considered a luxury and the tax payer should not be expected to subsidise those costs.
14. Consider increasing registration fees and mooring fees for privately owned pleasure boats, with annual cost of living increases being applied on each.
15. Introduce referendums in Jersey for all future public spending totalling over (say) £1million. (The steam clock springs to mind – few people wanted this and the cost was outrageous, as was the millennium clock)
16. Make all States debates open to the public. We may have elected States members but that does not give them permission to go ahead with proposed capital funding without recourse (example as per item 15 above)
17. Reintroduce full tax relief on mortgage interest for mortgages totalling £400,000 and below, with the capital borrowing amount to be raised annually in accordance with Jersey cost of living index. All mortgages above £400,000 to remain as is and would not qualify (either in part or whole) for any relief.
18. Reforming how housing qualifications are obtained. Control immigration into Jersey and consideration of Visa/work permit on a fixed term basis.
19. Allowing all Jersey born residents to come and go from the Island as they wish and without recourse.
20. Possible introduction of landlords having to register rental amounts being charged on residential and commercial properties. This could result in control over rental amounts being charged and control over proposed increases. A system like this would also double up as a control over tax payable.
21. Abolish all parking charges for public car parks outside of central St Helier thereby allowing tourism to stand a relative chance of recovery.
22. Consider allocating (say) 6 free parking spaces on a 2 hour disc for each business outside of central St Helier. (e.g. it is currently impossible to get to First Tower café without paying parking charges. This particular business has also suffered additional losses caused by continuing road works in the area)
23. Abolish all parking charges for public car parks at, or near beach locations. Tourists should not be expected to pay to spend a day on the beach. This policy is bad for tourism and the costs of policing probably outweigh any possible gain.
24. Disclosure to the public of who is allocated, and how many cars in total are supplied to each department within the States. Consideration should be given to reduce the amount of vehicles available and in some cases, should be abolished altogether. (e.g. the Viscount’s department require at least one vehicle. Consider officers using their own vehicle with payment for servicing and petrol to be met by the tax payer)
25. As all new cars now carry manufacturer warranties covering several years replacement cars should no longer be automatically made on an annual basis. There should now be a minimum 3 year ownership or mileage in excess of (say) 50,000 miles to be met prior to any replacement being considered.
26. Social Security is considered taxation and as such, full transparency is required on this department. Full disclosure should be made available to the public of the total amount of funds collected and how these funds are currently applied.
27. Priority consideration to be given to reducing the amount of Ministers, Senators etc., currently employed by the tax payer. Many Islanders believe many of the States departments are over-staffed with (often unnecessary) Managers earning high salaries. Do we actually need a ‘chief’ Minister?
28. Explanation to the public of why highly paid managers have been brought in from UK to work out ways of reducing hospital costs. The hospital currently have a tiered management system with no one taking any responsibility for anything. The doctors and nursing staff should have a voice on how the hospital is run instead of administrative staff. In addition, what exactly are the current managers managing?
29. All States departments to be audited annually with the auditors having power to enforce (removal etc.,)
30. All politicians to be elected in one go.
The above is just a start….done in thirty minutes and without much thought having been given. But at least it is a start!
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I am now thinking that this might be a Spring Heeled Jack / Anne coalition
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Crikey Anne, you’re good! You have been given instant promotion to Treasury Minister in the Love Jersey party!
Come to the Facebook site “Love Jersey” and join.
Small steps everyone!
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Anne # 18. Your ideas have my full support – you could use this as your manifesto, when you stand for election. You’d have my vote – next stop Chief Minister.
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There is no doubting the public sector has boomed over the years, but so too has the public’s willingness to rely so much on what is provided by it.
How many times do people shout about wanting the public sector to be more efficient and become more businesslike then complain that they are too much like a business. I am sure that there is still waste and inefficency, but not that much to plug the gap. Whatever the figure is, you cannot get away from the fact that the non-essential services will have to go.
It cannot be right, for example, that the States still look after private gardens on privately owned estates. Utter madness.
I work in the States. I believe that the service we provide is generally a very good one. But we also do lots of things that we should not be doing. Things that can be done better by the private sector or just not done at all.
By al means trim the fat and cut the waste, but there is only so much that you can do before you start hitting services. The only real way to do it si to have a complete cultural shift away form the current way of doing thins and start creating structures which match the services that NEED to be provided. Not, as is done no, of matching the service to the structure that has evolved. That is the difficult part.
Finally, if we are able to concentrate on providing those services which are absolutely essential to all of us, we can focus on these and not deal with the dross that is of little benefit to the general population. Too much of what we do is done simply because it has always been done that way. When you look into it further, no-one actualy know why it is done and can’t remember when it started or why.
Focus on what needs to be provided and cut the nice to haves.
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Anyone who wants to live in Jersey for reasons other than the love of Mammon would gladly abide by all of Anne’s suggestions. There is nothing unreasonable there.
I particularly endorse #13. It is a disgrace that this perk exists while we are supposed to be saving the planet and reducing emissions. Encourage boating under sail, it’s quiet and it’s green. I would sail the car if it weren’t for the trees and wires!
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Most of Anne’s policies are plain barmy but as RB Bougourd has picked up on 13, lets start there:
“Consider increasing duty payable on boat fuel to fall in line with that paid for motor fuel. Privately owned boats (excluding fishing boats) should be considered a luxury and the tax payer should not be expected to subsidise those costs.”
Well, firstly, there is no subsidy. Not taxing something is not the same as subsidising it. Of course it should be taxed, as should aircraft fuel. However, if Jersey tax it and Guernsey doesn’t, people will simply buy their fuel in Guernsey. They may even plan trips to include purchasing fuel, this increasing emissions still further. Any motorboat from France will go to Guernsey instead of Jersey. So unless the Channel Islands and nearby France all agree the same duty, there will be arbitrage.
The problem with virtually all these schemes is they show no account of game theory: in other words, people modify their behaviour to minimise the effect of the tax change.
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Thanks for pointing out the the “work around” for avoiding a future fuel duty, Donald.
Nevertheless, to dismiss Anne’s suggestions as “just plain barmy” is surely to indicate that you are either trying to be controversial for the hell of it or you have a lot to lose if the suggestions are implemented.
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I am pleased to have generated responses, both positive and negative, particularly as my comments were posted quite late.
It would appear Spring Heeled Jack and I were born around the same era. The era which believed equality and justice was available to all. I shall be looking up ‘love jersey’ on facebook Spring Heeled Jack, and thank you for the invite.
Donald Pond starts his comments on #13 but unfortunately stops there too. As I said Donald, I made all my comments in a half hour without much thought. Do you have any views on any of the other comments I made, particularly #’s 29 and 30?
Friends and colleagues, including myself, have had to ‘modify’ our lives due to the increased financial burden being placed upon us. We cannot modify further – there’s nothing left!
It is the States who need to modify spending. I understand there is now talk of a 2% pay rise for States members. That’s rich, and very timely given the current economic climate. Still, there’s nothing like rewarding oneself for work well done!!
The pure frustration and anger I feel about the way this once beautiful Island has been steered over the past decade makes my blood boil!
It doesn’t take the Brain of Britain to see that greed has taken over Jersey in totality.
We have an unelected chief minister who resembles more of a dictator than a member of our community. This same minister doesn’t believe in referendums in Jersey, he mumbled something about us voting (which we didn’t) them in to govern and that’s what they will do. The same minister who told us in no uncertain terms that to protest against GST would not change anything as ‘it will happen anyway’ and then promptly arranged for protest sheets to be made void unless full addresses had been inserted. Who does this dude think he is?
He seems to forget who pays his salary!
I am more than fedup with the beaurocratic nonsense I face from States departments finding that if they can’t tick a box, then ‘the computer says no’ attitude prevails. Even a director in Social Security (fondly referred to by myself as ‘the SS’) has no authority to make decisions. Hell, what exactly is he being paid to do? And why give him a title he is not allowed to live up to? If he cannot ‘direct’ then why on earth is he called (and paid as) a director?
How is it that none (or few if any) of these highly paid managers/directors have no responsibilities written into their employment contracts nor any authority to do anything, apart from draw a large salary at our expense?
I, like may other people residing here, am aware corruption in Jersey is high and has been so for far too long, but if we all choose to sit around moaning without conviction, then nothing will change.
Perhaps now is the right time for us to stand together?
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