Too hard, so States won’t tackle it
Tuesday 18th November 2008, 2:25PM GMT.
ANYONE who has followed the emergence of the island’s zero-10 taxation strategy, the latest Budget and now the comments of the Treasury minister published today will realise that something of a crossroads has been reached.
Having agreed that a central plank of the strategy was public expenditure restraint, Treasury and Resources – without asking for the States to rescind its original decision – has dropped that approach and instead says the next phase will depend on the state of the economy ‘and the level of public sector income’.
That’s another way of saying tax take. And since the economy is faltering and the population has been capped, thus preventing job creation, it is pretty clear where T&R is heading.
Add to that the minister’s shoulder-shrugging attitude towards controlling States payroll costs and islanders can see that the department has simply thrown in the towel – and it will cost them dearly.
The inflation-busting payroll rises this and next year will add an extra £7m.-plus to staff costs. Add to that the same amount T&R wants to gift to an unsustainable public sector pension scheme and the minister will be looking to every taxpayer to give him £330 more on top of everything else.
But it won’t end there.
If, God forbid, Guernsey experiences equivalent unemployment levels to the UK then the double cost of increased benefit and reduced ETI will also fall to the taxpayer. Why? Because the T&R model does not allow for a public sector that this island can afford.
It has given up on trying to manage variable expenditure – the so-called formula-led costs – and capitulated on staff. So all that is left are service cuts or still higher taxes.
The tragedy is that the States has had years to prepare for this but ignored the expert advice from the Audit Commission on managing these things. Instead, because the commission was effective, embarrassing and – worst crime of all – independent, government closed it down and put in place a scrutiny process manned by its own members, who are much easier to control.
Unlike the States’ own spending.
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If other governments in the civilised world can have hard hitting independent minded scrutiny committees then so can we. It is actually an attack on our democratic system to argue that you can only have independent effective scrutiny if it is by people who are not elected.
The way forward is surely for there to be a scrutiny committee for every government department. In the case of Treasury it should be our equivalent of a Treasury Select Committee.
In the absencde of that the monitoring of Treasury and Resources should be by the Public Accounts Committee.
Our scrutiny committees of Public Accounts and Scrutiny are rightly made up of people elected by the public. If they don’t do a good job the public should take this into account at election time.
Our scrutiny committees can use the skills of people in the community who are not elected for particular investigations and perhaps they should do more of this.
However, whilst the Audit Commission did a good job, that job has evolved to something better, and now we need something better again.Good government is the constant striving for improvement.
Tony Webber
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