Finance profits drop
Wednesday 29th June 2011, 2:59PM BST.
Treasury Minister Philip Ozouf
PROFITS in the finance industry last year were at their lowest levels since records began, according to official figures released today.
The level of profits at £605 million fell by 25% last year from £809 million in 2009 and plummeted by 60% compared to 2008 when profits were at £1.5 billion.
They were at their lowest since the survey of financial institutions started being compiled in the mid-1990s.
The Island’s Treasury Minster Philip Ozouf said that the falling figures did not mean that there would be any need to hit Islanders in the pockets with tax increases to make up the difference.
He said that financial forecasts had already been revised downward twice and that actual taxes received for 2010 were not reflective of such a large drop in industry profits.
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“The Island’s Treasury Minster Philip Ozouf said that the falling figures did not mean that there would be any need to hit Islanders in the pockets with tax increases to make up the difference.”
Yet.
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The Island’s Treasury Minster Philip Ozouf said that the falling figures did not mean that there would be any need to hit Islanders in the pockets with tax increases to make up the difference.
Who he trying to kid!
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I suspect that the main reason for the loss of profits must be the continued extremely low interest rates. Those of us with some savings are getting a lot less income from them. There is a lot less incentive for people in other countries to want to invest here now.
With the lower incomes we pay a lot less in tax and do not have so much available to spend or to invest again.
I can only blame Incapability Brown who was so proud of lowering the interest rates. It has become the cause of the problem and not the solution.
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“The Island’s Treasury Minster Philip Ozouf said that the falling figures did not mean that there would be any need to hit Islanders in the pockets with tax increases to make up the difference”
No there’s no need but that won’t stop him, there was no need for the 66% increase in GST, just tax the high earners a bit more and let the poor keep their heads above water but no, shaft the common man is Big O’s mantra.
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He said that figures were looking good for the future on multiple occasions.
What a lot of bollo…s
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You put all your eggs in one basket and suffer the consequences.
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This is not just island related, it’s a worl wide economic downturn
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I think Philip is missing the point – the underlying problem is the lack of profitability in the sector – which will undoubtedly lead to further job cuts as companies try to improve their margins
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‘actual taxes received for 2010 were not reflective of such a large drop in industry’
No but taxes received for 2011 will! 605 million profits = 60 million tax which means the finance industry is paying in tax approx 9% of forecast States expenditure. Who finances the rest?
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@ 3 – Do you even understand why companies choose to register over here/investors choose to invest? It’s for the tax benefits, not a sizeable interest gain..
@ 8 – I’d say that £605m profit does not signify an underlying lack of profitability…
Crikey Mikey, the basic fundamentals certainly tend to elude an awful lot of people.
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Its news like this that will keep us in recession with all the gloomy downward trends that go with it, and lets face reality we may never fully recover to the best of times.
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so are mine, due to rising prices of fuel ,food and taxation.
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@ John Rambo….. hmmm errrrr no economic turn down here, its crazy, this city has an estimated 2 to 3 million job vacancies.
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“I can only blame Incapability Brown who was so proud of lowering the interest rates. It has become the cause of the problem and not the solution.”
If interest rates went up to something reasonable, say 6%, Jersey would take an enormous thrashing.
The only thing that is keeping a lot of island debtors above water is that they are paying very low rates on their borrowings.
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Well no surprises there what with the EU clamping down. Hence the need to go touting for business elsewhere.
No doubt GST will go up to fill in the next hole. Things are not looking good in the “Jersey is well placed” quote roled out by Ozouf all too frequently.
Valid points no.4 get rid of the social security cap and hit the high earners a bit more they can well afford it on their mega salaries. They wouldn’t even miss it.
6. guite right I said this would happen 20 years ago when finance grew too big for its boots. Now they call the shots. Don’t say you haven’t been warned. Expect a hike in GST and other taxes to make up for finance’s dwindling returns to the tax pot.
I predict a toilet tax will also be on the cards once all JNWW customers are on meters. Yes things arte fine and dandy in CoM world
meanwhile those at the sharp end are finding it harder and harder to get by.
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“He said that financial forecasts had already been revised downward twice and that actual taxes received for 2010 were not reflective of such a large drop in industry profits“.
“ Taxes received for 2010 were not reflective.”
This is because of 20 means 20 and all the other taxes, including the less obvious stealth taxes people of Jersey are having to pay, made up much of the shortfall. Things being a little tight have resulted in many not having a wage increase in the private sector while inflation still increases unabated.
According to the States accounts for 2010. The wage bill, including s/sec. and pensions etc is £345,246,020. In 2009 the accounts show a figure of £327,149,000.
This means the public sector have paid themselves £18,097,020 more, or in simple terms a wage increase of 5.5% although this is not the complete truth. States employed 556 staff in 2009 this has actually risen by 52 to 598.
Let us not forget Minister Gorse proposes a further 2% increase on s/sec. Up goes the huge social security States of Jersey contribution as an employer. Who has to pay the increase ? Everyone (GST).
For all your words Senator Ozouf the figures tell us a different story.
The cost of the public sector wages, s/sec. and pensions is spinning out of control, even the UK understands this, obviously you and you Ministers don’t, other wise you would be reducing ( non front line ) staff and entering talks about closing the final salary pension scheme. We see neither.
Davey West.
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Company x made £3m last year / made £1.9m this year – answer ? slash 12 jobs saving around £600k for next year.
Multiply this over 60 or 70 companies and what do we get ???? Stormy weather ahead !
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Good old Senator Phillip Ozouf!
Sitting in the front parlour telling everyone that it is fine while his mates are bundling their goods out of the kitchen door, bathroom window at the back
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In 2008 companies paid more in direct tax than salary and wage earners. By 2010 salary and wage earners paid more than 3 times as much direct tax as companies paid. For 2011 it will probably be more than 4 times as much.
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No 16. your numbers do not make sense. The States employed more than 598 people surely?
If they were paid £345million, that works out at around £577k per emlloyee!
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“Company x made £3m last year / made £1.9m this year – answer ? slash 12 jobs saving around £600k for next year.”
That is the way forward.
Replace or outsource the meat.
More computers sitting in a data centre in Jersey and use VoIP to connect the customers to a call centre somewhere cheap!
I would say simples…
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All we need now is the States lefties to get into power and start taxing offshore corporations so they all leave and then finance will be all but a memory!
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As an “interested outsider” (FRENCH) who has been here for 11 years – I feel there is either a lack of understanding – or a complete denial of the severe issues that this lovely Island faces.
The politicians and some of the “old guard” from the finance sector ( who are frequently one and the same) do not seem to be able to grasp the reality that the Island will have falling income, over the forseeable future – allied with increasing costs & a pension time bomb soon to go off. House prices will fall, living standards will fall, and the politicians seem to worry about the town park – Nero fiddling whislt Rome burns is the obvious parallel.
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Adrian,
Is there any comment so stupid that you will not make it?
“Well no surprises there what with the EU clamping down. Hence the need to go touting for business elsewhere.”
You may not have realised but the EU is skint. It has no money, no prospects for economic growth, it is yesterday’s news. The cash in the world is in the Middle and Far East. Nothing to go with the savings tax directive, just simple supply and demand.
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Adrian, yet another vindictive comment from you regarding high earners who, you say, would not miss the disposable income they would lose if the Soc Sec cap was removed. You may have missed it but the States have introduced something called “Twenty Means Twenty” which is having a significant impact and, yes, those affected are missing the money.
I realise that in the communal society you crave we will all be paid the same (at the lowest common denominator), regardless of endeavour, study, commitment, training, development, achievement and contribution, but that is a view often put forward by those who have none of the above but do have a long list of excuses and other people to blame.
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“The Island’s Treasury Minster Philip Ozouf said that the falling figures did not mean that there would be any need to hit Islanders in the pockets with tax increases to make up the difference.”
And we can always believe what he tells us… can’t we?
I mean, he has never gone back on his word on tax increases in the past… has he?
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Funny, life is quite simple in the real world – a company starts to loose its profits – and reacts by cutting costs – hence we will see rising unemployment in Jersey in the private sector in the not too distant future.
Unfortunatley – the States do not live in the real world – as they see rising costs and falling income – what do they do ? consider reducing costs – of course not, they put their head in the sand and stary lying !
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dave (20) No 16. your numbers do not make sense.
Nice one Dave you had me going there. I think Davey West must have dropped a decimal place on the number of employees. This would allow for a capitation rate of about £57K,
Much more reasonable.
The States employed more than 598 people surely?
If they were paid £345million, that works out at around £577k per emlloyee!
Davey West (16) Nice post, you are forgiven your slip of the pen.
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The Island’s Treasury Minster Philip Ozouf said that the falling figures did not mean that there would be any need to hit Islanders in the pockets with tax increases to make up the difference.
I love Phil.. There may not be any need, but he will anyway – One trick pony.. raise the taxes, spend spend spend…
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The more I see of him the more I feel the blood boiling.
He is always full of good news.
I wonder if he ever listen instead of twitting.
And may be soon he will realize that the Island is not only made of his posh friends and the working class is going to show him what were are made off in the next election.
G.S.T stands for : God Save the Treasury …
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Certainly there are between 6,500 to 7,000 public sector employees the figures are for senior staff only, and gave the wrong impression.
Jersey has 598 employees getting paid between £70,00 and £309,999, an increase of 52 senior staff on the year before.
Please go to page 84 using the link below. I hope this clarifies the case, apologies for the confusion, however the total wage bill stays the same.
More proof, if any were needed, that there are to many managers on an island twelve miles by four.
http://www.gov.je/SiteCollectionDocuments/Government%20and%20administration/R%20FinancialReportAccounts%202010%20JMB.pdf
Davey West.
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You may not have realised it donald but the EU was not skint when GST was first discussed. Therefore you comment is ill thought out.
You have also overlooked the fact that there are still a lot of high nett wealth individuals left in the EU.
Indeed the Far East is soon going to outstrip the US and EU at projected rates of growth unless the whole goes down the tubes before hand. A US led collapse is not completely off the cards, this would cause turmoil, as China sits on one third of all US debt it would also be affcted as would Japan who also holds US debt. You are probably unaware of all this as your knowledge seems rather patchy to say the least, a bit like RT’s
Another point to raise is why should Jersey be able to do a better job than HK which is on China’s door step and as of this year the largest finance centre after CoL and NY? The time zone is also out somewhat between Jersey and HK/China.
Mike if someone on 42k loses 6.5% of income to social security then why should someone on x10 earnings pay only 0.65%?
How can you say that someone on 100k is going to be adversely affected by their percentage going up from @ 3% to 6.5%. This is 3k going up to 6.5k in otherwords 3.5k. If you think this will have much effect on high earners then you are very dim.
20means20 is impacting on everyone paying tax. However 20% of 20k after allowances leaves much less disposable income than 20% of 100k after allowances. If you knew anything about economics you would realise this. The high earners are also aided by social security contributions of less than 6.5% another advantage over lower earners.
At present high earners are losing less of a percentage in taxes out of their pay packets as lower earners paying tax. No doubt you see this as fair and just.
GST also adversely affects the poorer end of the socio-economic divide.
Mike “regardless of endeavour, study, commitment, training, development, achievement and contribution…”
Who says any of the above are needed to get on, it is possible to get on with very little/none of the above. B.S. can get someone a very long way in today’s world elsewise known as gift of the gab. So that blows a hole in your work hard and be guarenteed to get rewarded protestant work ethic.
Many who have most or all of the traits you mention above get very little reward for all their commitment. I have seen people getting little reward for high commitment, some have been shown the door due to downsizing. What have you got to say about that then?
Nowhere have I argued for a lowest common denominator as you seem to think. This is yet more right wing propaganda from you. You equate a decent set of values society as communistic and try and rubbish it.
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No. 30
Face to face, Senator Ozouf only ever appears to listen but he always has his own pre-ordained plan which he intends to pursue regardless.
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15. Commrade Adrian,
Once again spouting off his usual nonsense. I would love to know what Adrain did/does as a job, and why he is so angry at the world.
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How many Credit Cards are issued to Civil Servants?
A: Unknown. The states have lost track of the MANY HUNDREDS of cards issued…
Why?
A: Because they are incompetent and do not want any repsonsibility.. They like to spend others money.
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“Mike if someone on 42k loses 6.5% of income to social security then why should someone on x10 earnings pay only 0.65%?”
For the same reason that they pay the same at the supermaket, gym or hospital. Social security is not general taxation.
You could ask another question. If the Island spends £600m a year and the population is 100,000, that means £6,000 per year is spent on each person (on average). Why then should anyone pay more than that?
Or, if the average wage is say £20k, then anyone earing £40k must be very well off and therefore any earnings over that should be taxed at 100% as it is unfair for anyone to earn more than double what someone else does.
If “fairness” is the driving force, you can justify either of the above positions and anything in between. Wasn’t Gordon Brown always going on about fairness and his moral compass?
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@36
You could ask another question. If the Island spends £600m a year and the population is 100,000, that means £6,000 per year is spent on each person (on average). Why then should anyone pay more than that?
If you take the kids, the pensioners, the one on benefits, the unemployed…
Your working class is may be 50 000.
So half of the population is getting money from the over half.
Nothing fair here to start with and cocooning the rich is even more unfair.
You have millions, share them like the average working class does.
If the rich were to go , the ” I rip you off ” mentality might go away with them.And prices might go back to normal.
We could build lot of affordable houses on all the land they occupy.
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Senator Ozouf says that falling profits does not mean that GST or taxation in general will increase, well that is exactly what it does mean.
In any case nobody in their right mind could ever believe a single word that man ever speaks, he will come unstuck and will either resign in disgrace or be chased.
It cannot come quick enough!
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Come on Phillip, stop messing about.Tell us the truth.Whats coming our way in the next few months?Stop bullshi**ing. Give it to us straight for a change. £20 million for a new police station or part of.We don`t need a bigger police station because this week we were informed that our “crime” figures were the lowest recorded for over 15 years. We have no serious crime here. The mainland police force refer to our force as “The Gucci Police”, well dressed and overpaid.Never getting thier clothes dirty. Phil, if you are so confident about your position,resign now and put yourself up for election in october.Go on,dare you. Give the people of jersey a chance to express thier disgust with your policy`s.
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Maybe just maybe, with the uncertainty of finance Jersey may decide to be prudent and diversify its industries. That would allow many young islanders, who are not interested in devoting their life to figures, return to their home, due to diversifying job opportunities.
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“Gucci Police” lol
So true
So many women officers around, It cannot be that dangerous, therefore far to justify the wages, pensions and the rest of the perks.
They probably moving the station to have more ladies toilets…
No offence ladies, nut I do not see how useful you can be in stopping fights at the week end, which seems to be the major disruption over here.
I did 1 claim to the police for vandalism on my motorbike which was parked in front of the camera. They couldn’t be bothered watching 1 week of security video and didn’t allowed me do it for them.
When my push bike was stolen I didn’t bother wasting 2 hours of my time in the police station again.
Same thing for my wife’s stolen push bike…
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Adrian – “Twenty Means Twenty affects everyone paying tax”.
Um, no, it just doesn’t.
I can’t really add to that, it just doesn’t.
As for the rest of your nonsense, desperate.
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Adrian:
http://www.gov.je/TaxesMoney/IncomeTax/Individuals/20means20/Pages/Examples.aspx
Come back and say sorry.
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Mike (43) Adrian Come back and say sorry.
Mike, there is no capital gains tax in Jersey! Correct? Please explain why the practice of gifting houses? Where does that fit into 20:20?
Adrian may be to the left of my own political stance, but he is speaking more sense than most. Mike, maybe it is you who should say sorry.
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D Bond spouting his usual flat tax (flat earth) diatribe. No one believes that social security is related in any meaningful way to that liability alone. Its all in the mix as part of general taxation. Which is why it is an anathema to a cohesive society to have it cut off and not progressive.
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25, and yet you’ve gone to the other extreme! Only in Jersey could the taper of 20:20 be called part of a progressive tax system!
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Mark, you may not have read earlier posts. Amongst Adrian’s usual rant was the statement that “Twenty Means Twenty affects everyone paying tax” (as opposed to impacting us higher earners only). As this is factually and clearly incorrect, I have sought not only to point this out but also provide a link to some examples which demonstrate my point.
Adrian usually alleges propoganda in the face of anyone disagreeing with him. Propoganda has conotations of mistruths, so I am also pointing out that Adrian is being hypocritical because he no speak the truth here.
i don’t think lying helps debate, do you?
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Mike(RT)have you ever paid tax in Jersey? If you have you would know that certain allowances have been gradually cut since 2006 and now are removed from 2011 tax bills completely.
How you can argue that the removal of these allowances has no effect on someone’s tax bill is interesting. Maybe you could give an example to back up your claim, if you are able. I await your example to back up your statement.
Still no comment on the rest of my post, it is pretty obvious you are unable to put a reasoned argument up against it.
Cheers Mark good to see others can see the reality of things unlike the usual suspects.
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Mike you are right, Adrian has no idea what it means. If you have a mortgage, child-care, then the tax rebates still occur, and you pay less. Adrian isn’t aware obviously of the Marginal Tax system which operates. The only people who pay 20% are those who don’t come under the marginal process.
Does Adiran actually realise this is JErsey Channel Islands, UK, and not New Jersey to which he rants on about?
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“Mike you are right, Adrian has no idea what it means. If you have a mortgage, child-care, then the tax rebates still occur, and you pay less. Adrian isn’t aware obviously of the Marginal Tax system which operates. The only people who pay 20% are those who don’t come under the marginal process.”
An allowance is a sum that may be earned before tax is payable, a rebate is a return of excess tax paid.
Under 20 means 20 a lot of allowances have been removed or reduced.
People on really low incomes have gained under the new system as personal allowances have risen slightly.
Most of us have lost out; withdrawal or limitation of interest relief, taxation of benefits in kind eg a parking place, GST, etc has made middle Jersey a heavier tax payer.
Back in 2000 the average finance firm paid more tax than it’s employees.
Now the tax burden is carried by the employees and their wages have not risen by the same percentage.
A bigger part of the smaller profit cake is being sent home to the parent bank and less money is going in to the island economy.
Jersey is being strangled by it’s main industry and the CoM wil not admit it!
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Pip what do you expect when one industry becomes so dominant?
The EU are also applying pressure….
There can only be one end result on the present course and it will end in tears.
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