It’s a strange fact of Jersey life, that although we’re prepared to bring in scores of experts and consultants from outside the Island, we don’t often look at how other similar jurisdictions tackle similar problems.

Yes, we sometimes look at what they are doing in Guernsey, but usually only to try and pick out what they are doing wrong. Perish the thought that they might have some good ideas.

So while our civil service is beginning to look like a branch office of Warchester County Council, we ignore anything going on outside our shores in jurisdictions that are much more similar to us than some UK local authority. Thank goodness our seafaring ancestors didn’t have this restricted view of life.

It would be a good idea if some of our political leaders got on a plane and went to visit some of these jurisdictions while trying to maintain an open mind. They might learn something. Perhaps more often than not, what they learnt would be how not to do things, rather than examples of best practice. But at least they wouldn’t remain in isolated ignorance.

Apart from looking for new ways to revitalise the tourism industry, our globetrotting politicians might find different ways of tackling the recession and looking after the public finances. It’s all very well our leaders telling us that we’re much better off than most of our competitors, but we are still suffering.

Recent budgets in other similar communities might show us that the Jersey way is not the only way. We’ve already seen how Guernsey has virtually shrugged off the effects of the recession and their recent budget contained so little bad news that even their treasury minister described it as boring. The message here, of course, is that a diversified economy is vitally important and when you do have a recession, don’t panic.

Our other fellow crown dependency, the Isle of Man, has also just had its budget. There they have managed to reduce government spending faster than planned and income has come in at £17m above budget. This was mainly to do with VAT increases, although direct taxation has also come in at about £6m above budget, with resident tax remaining strong because of near full employment.

By keeping expenditure down to the budgeted level of £535 million, the Isle of Man is now projecting a small surplus for this year of £1.7 million.

It’s true that this has required the loss of nearly 400 public sector jobs in two years, and staff costs are £9m less than last year. But this wasn’t needed because of the recession. It was the result of a devastating blow from the UK Government deciding to change the VAT sharing agreement resulting in a £100m loss in revenue. A year ago, the government estimated it would need to take £114 million from reserves in order to balance the budgets over a five-year period. Now there is a realistic chance of not needing any withdrawals at all.

The Isle of Man has actually weathered the recession very well, and the treasury minister said that the underlying performance of the economy continues to be strong. Growth has averaged 6% a year over a quarter of a century and even last year the economy grew by 4-5%.

This is mainly because the Manx Government has been prepared to invest in growing and diversifying the economy. Finance still employs 20% of the workforce, but its proportion of GDP is falling. Manufacturing now employs 3,000 people, e-gaming 600 people and the shipping sector 500 out of a population smaller than Jersey’s. There’s surely a lesson to be learnt there.

Incidentally, the Manx treasury minister made an interesting comment in her budget speech in relation to the zero-ten tax regime, where there has been some coordination with Jersey. The EU code of conduct group looking into zero-ten has always been a political body far more than it is a tax oversight committee, she said.

‘We have needed to keep the political nature of what we are dealing with at the front of our minds, and not fall into the trap of assuming that we can deal with the Code Group purely in relation to the finer points of tax law,’ she said. This is certainly what Jersey appeared to do, although I’m sure our negotiators weren’t that naïve.

To be fair, our politicians do keep a fairly close eye on what is happening in the Isle of Man even if they tend to ignore it, but they rarely look at similar jurisdictions further afield.

For example, there are a lot of similarities between Bermuda and Jersey. They are both leading offshore finance centres and tourist destinations and have a British heritage and similar sized populations. So how are they doing?

Well not very well, according to their recent budget. The economy is suffering and GDP fell 5.8% in 2009. However that didn’t stop the finance minister, who is also the premier, from producing what might be called a ‘give away’ budget.
This is despite the fact that this will add to government debt, which is already more than £600m plus an additional £120m in bank guarantees.

She (yes, another she – perhaps there’s something to be learnt there too) actually cut Bermuda’s main tax. The payroll tax reverts to 14%, which is the equivalent of giving £30m back to taxpayers next year. Not only that, but despite speculation about government job cuts, the premier said that the number of jobs she was planning to shed was zero.

She added: ‘In sharp contrast to the severe corrective measures forced on many of the world’s leading economies, the Government of Bermuda is endeavouring to avoid having to cut public sector jobs. That this is an option at all is due in no small part to the wise leadership of our unions.

‘Most have recognized the need for hiring, pay and overtime restraint, rather than risk the instability that could accompany job growth and wage inflation at such a critical time as this. This cannot have been an easy decision for our labour movement and Bermuda is truly indebted to these leaders for recognizing the dangers and pursuing the greater good of our community.’

There’s a lesson for us all there, and not just government.
By Peter Body, editor, Business Brief magazine