Treasury’s sums make black hole seem worse
Thursday 12th March 2009, 2:30PM GMT.
Chief Minister Lyndon Trott faces the media at a press briefing at Les Cotils yesterday on a new draft framework to control any borrowing the States may undertake. (Picture by Steve Sarre, 0737092)
MORE than half the £65m. annual hole in States finances has been caused by the way Treasury does its sums, it was claimed yesterday.
The figures came to light after a press briefing given by Chief Minister Lyndon Trott, who was the Treasury minister last term, and current incumbent Charles Parkinson on a new draft framework to control any borrowing.
In a clear sign of a fault line between the two, Deputy Trott used it as an opportunity to cast doubt on Treasury’s economic forecasts, which led the department to warn last week it may need to raise an extra £52m. in new taxes.
He stopped short of explicitly criticising Deputy Parkinson, who last term opposed the zero-10 tax strategy led by Deputy Trott, ending by saying he had full confidence in him and it was for individual boards to decide how to implement policy.
But Deputy Trott has been under pressure to explain the difference between the anticipated deficit when he left the job – around £12m. – and the new shortfall. And what he revealed will fuel claims that the new Treasury minister is not doing enough to control States expenditure.
Deputy Trott said that an extra £20m. a year was the result of a different interpretation of the capital spending policy and another £7m. annually came from more funding for the public sector pension scheme.
The Guernsey Press later learnt that a further £6m. which Treasury is looking to recoup in taxes was because of demands it faces from departments that have been using money left over from previous years’ budgets to fund spending – that will dry up at the end of the year. Treasury released the money rather than withhold it as a form of enforced saving.
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From the Press on line i have no idea what an” an extra £20m. a year was the result of a different interpretation of the capital spending policy” means.
However, the necessary £7m. annually came from more funding for the public sector pension scheme seems clear enough.
What I do find interesting is that when the figures are mmore favourable to the pro zero 10 gang they are used, as in the announcement days before the April 2008 election of a £70 odd million surplas.
Funny how figures that suit your case are ok, but not if they don’t.
Can anyone explain why?
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I find this odd. Charles is the man at T&R; he is respected, liked and has credibility.
Why is the CM trying to undermine him?
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That announcement the day before the election was a disgrace.
It would seem that Trott’s idea of being a ‘perfect statesman’ entails spreading misinformation about colleagues and performing policy u-turns when it comes to tactical voting. 11 months in to his tenure and it is clear that the next three years will prove to be the most alienating for the electorate to Guernsey politics.
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Deputy Parkinson is a well-respected Chartered Accountant with a wealth of experience. I seem to recall when he got the job at T&R he said he wanted to bring the States accounts into line with established financial reporting standards.
One of the fundamental aims of accounts is to present a proper representation of financial results to users of those accounts. That is why we have accounting standards. If Deputy Parkinson has brought the States accounts into line with accepted standards then they are likely to be presenting the most true version of the financial situation.
Need I say more?
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Where did Parkinson’s figures come from? Was is not UK consultants estimating, projecting, assuming? Forgive me if I am wrong but will go away and check the archives
I would prefer the CM to challenge but how would the GP react if he continually said no comment to questions? When Parky goes through the figures with our CM then I am sure he will be happy to support these figures given their origin
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We seem to be copying the UK:
A Chancellor/T&R Minister who introduces policies that (he makes) sound good while he’s Chancellor/T&R Minister, who then goes on to become Prime/Chief Minister, at which point everyone discovers that his policies have left the pot empty….
Parkinson and Matthews were right and Trott was (and still is) wrong.
There’s no one else to blame.
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The CM is on a damage limitation exercise then. It just remains to be seen whether CP will have the backbone to correct, what he likes to referred to as, Guernseys prime minister.
It is high time somebody stood up and publicly corrected the CM because it seems as though he can get away with a catalogue of lousy mistakes and still nobody objects.
He is now calling another ministers professional abilities into question. Are we about to see our first vote of no confidence? I hope so.
I know whose figures I’d rather trust.
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Isn’t this what they call back pedeling… ?
I can imagine the conversation in treasury…
“Oh dam and blast Parky.. natives are getting upset cuz were going to sting em for more tax.. Quick boys change the story”.. “Tell em what the want to hear not what they need to know”..
That’s how I imagine thing we said in the treasury
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What intrigues me is the look the lady sitting to the left of the CM is giving him.
Is she the person who on being appointed States accountant, said the accounts were not fit for the purpose?
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Dont worry, They want to scrap zero-10. Make your mind up states!
http://news.bbc.co.uk/1/hi/world/europe/guernsey/7941757.stm
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Oh dear! will you never learn; it’s just one big mess all round.
Tell them to cut the cackle a get on with the job they were elected to do.
All this back biting is what you expect in a children’s preschool.
Are we all talking to adult people? to me they sound like children dissatisfied with their Plum CAKE.
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The one thing that they all agree on is that there is a black hole that needs to be filled.
So far, the agenda seems to be filled with ideas on how to extract even more money from the man in the street (who also happens to be the voter but the next election is some time off so they don’t care about us just now – they will when they need our votes, but not right now).
There is an alternative. In Bermuda they raise revenue from a tax on the payroll that businesses pay their employees (you can find the details on the internet @ http://www.taxbermuda.gov.bm/guide_payroll.htm). Some of the US States also charge a similar tax.
The advantage here is that, like Bermuda, exemption from the tax can be provided to sectors which are weak and need support. Tourism including hotels and restaurants, taxis, horticulture etc. etc. can all be exempted. Thresholds can also be introduced so that businesses with less than, say, 10 employees need not pay the tax.
It applies to businesses whether partnerships or companies and is only applicable to the payroll of people reident in Guernsey.
It can be variable – the higher the payroll, the greater the tax.
The Finance Industry would end up liable to pay tax in Guernsey. How about that!!
It’s not inflationery and does not directly hit the man in the street.
The collection system (States Income Tax quarterly returns & payments) already exists so, as with any Goods & Sale Tax, there would be no need for a new layer of civil servants.
Sounds good to me!
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