Five deputies set out their case against borrowing
Monday 23rd March 2009, 2:29PM GMT.
TREASURY’S massive borrowing plans are facing their biggest threat yet as deputies work on an independent report to challenge them.
Five have got together to draft a detailed document to make their case and have called for more to help them ahead of what is predicted to be a very tight vote in May.
The department wants to borrow £175m. to part-fund £300m.-worth of spending this term on projects including redeveloping Les Beaucamps High School, mental health facilities and the runway.
But those lining up against external borrowing believe it is not needed.
They point to a £30m. surplus from 2008 that could go towards the investment programme and argue that the £80m. for a waste plant was always expected to be funded by internal borrowing.
It leaves them needing to find another £20m. to fund the programme if the capital reserve was all used – that could come from measures including using the contingency reserve or raising airport taxes.
Nothing is finalised yet.
‘We are at a very early stage of developing our thoughts,’ said deputies Matt Fallaize (pictured), Mark Dorey, Roger Domaille, Sean McManus and Andrew Le Lievre in a letter to all States members.
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One word get rid of all Government type gold plated pensions.
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That is clearly more than one word.
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You’re wasting your time, Mrs P, if you expect any kind of sense from Andy. Have a look at a few of his other postings if you need further evidence.
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I heard deputy Guille on the radio last sunday in reference to sourcing more funding saying that we can’t ‘just print it’.
Why not?
In fact why not reduce income tax to zero and print all that is needed. Can anyone explain what the Guernsey money in current ciculation is based on. What is it referenced to? More importantly does it actually have any value greater than just fiat?
Money is such a fundamental part of everyones life yet so few people understand its origin in Guernsey. If it is referenced to the value of property owned by the states of Guernsey as some people believe, how has the selling off of property and property passed into the Housing Association effect the currency?
I’d recommend Guernsey Currency as a subject to be taught in schools. Why the mystery?
Englands GDP is roughly 1000 times greater than Guernseys’ and they are planning on printing and extra £150,000,000,000 So pro rata why can’t we print £150,000,000 ?
An article in the ‘Press’ explaining the nature of currency in Guernsey would help to enlighten the public as to what we are actually up against.
I suppose what I am trying to say here in essence is that in order for us to debate money issues then we really need to understand it’s origin.
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We are not the UK.
So far our economy has proven surprisingly resilient to the current financial crisis. We do not need to pump millions into massive capital spending projects in order to keep us afloat. The fact they need to do so in the UK does not give our government any justifcation for doing the same in Guernsey.
I accept however that there are certain priority projects (such as the refurbishment of Les Beaucamps School) which must be dealt with.
Let us be clear that the reason the States are considering borrowing money to finance these projects has nothing to do with bolstering our economy. They are doing so because a) they have squandered too much in the past and [more importantly] b)they stupidly cut off our main income stream when they introduced Zero 10.
Borrowing large amounts of money will not resolve the underlying problem that out tax revenues are currently insufficient to pay for our capital projects. On the contrary, as any credit card holder knows, debts are expensive and all we will be doing is making the problem worse.
We need to increase our tax revenues and the only fair way we can do that (without penalising local people)is to get together with Jersey and the Isle of Man and agree a fair tax on those individuals and businesses who benefit from our offshore tax regime. They can afford it and, provided other offshore centres agree to impose a simlar tax system, no one will being subject to unfair competition.
I do not beleive the offshore finance industry ever wanted the people of Guernsey to subsidise it. Zero 10 was the wrong decision and we need to correct it now.
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I don’t know if the position has changed in recent decades but until the 1970s the Guernsey (and Jersey) notes and coins were regarded as part of the Sterling fiduciary issue; it is not backed by Guernsey (or any other “real”) assets. The value of a Guernsey pound is, or was, inextricably linked to the value of the British pound.
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CD,
there is little chance of getting together with the Isle of Man and agreeing anything in the taxation field.
The reason why we have zero-10 is that the Isle of Man declared tax war on the Channel Islands by unilaterally going for zero-10. Their reason was to use it to attract finance industry companies to leave the CI and move to IoM. They believed that the CI would cripple themselves if they attempted to copy zero-10.
The IoM could afford zero-10 because they get a massive subsidy of well over £200 million from the UK via the common purse VAT fiddle, which is probably counter to EU regulations, but the CI are keeping remarkably quiet about it.
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David Cranch, hit the nail truly on the head when he pointed out the scurrilous way the UK does business.
The EU are also to blame, for they do nothing, I suppose it’s the old school tie all over again,
Eu Says you scratch my back and I’ll tickle your fancy:
And they talk nof nother countries bgeing corrupt???
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now is the best time to borrow money….we should also try to keep as much as possible in reserve. we dont want to be forced to borrow in the future when the rates are higher. i think most deputies should play SIM CITY now and again. might teach them a thing or two…
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CD is spot on.
All zero ten has done is shift the burden of taxation from companies (etc) to individuals.
Unless zero ten is reversed or reworked in some way we’ll all be paying a lot more tax.
As CD says borrowing will only cause more problems, now and in the future.
Remember its how the worlds finances got into the mess its in in the first place.
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Matt Fallaize is a Deputy? Is he out of school yet? My word….
On a serious note. The runway does not need any work – there are no jet aircraft using it (other than private) and further more, given the economic downturn air traffic is unlikely to increase any time soon. Get some bloke from States works to put some tarmac on the cracks and have done with it.
Beauchamps school? Why? I would love to see the specification for this work. If the school is watertight then leave it alone; there are things called remedial works.
Why does Guernsey need to spend millions on mental health services? All you need to do is make those mentally ill work for the Government, preferably as a Deputy, or maybe the head deputy. Seriously though – buy some of the German bunkers, paint the walls white and throw them in there.
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Interesting view on mental health care there Darren. The Nazis who built those German bunkers all those years ago held very similar views to you when it came to mental health care provision.
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Why does Guernsey not instigate its own bank?
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CD
If it’s the same Darren that I’ve had exchanges with in the past, it’s difficult to kow whether he’s being serious, semi-serious, or attempting humour. Whichever way his comments all tend to have one thing in common i.e. they’re idiotic.
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I’m impressed with what they are trying to achieve. As Dep. Fallaize said it’s better to start the process now, develop the thoughts and the argument than await for a load of random amendments to be thrown into the hat on or near the day of debate.
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Jackie is perceptive enough to see, and approve of, a developing organised opposition here.
I have always said I agree with the local dislike of political parties. Yet there must be a Guernsey way – ad hoc organised opposition on a particular issue. That is what this Group of Five are about. Watch carefully,: it may be the future of politics here.
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David Cranch and Jackie both make good points about an organised opposition. There is far too much States time wasted with the “random amendments” that Jackie mentions, some of which are frankly ludicrous.
Personally I have no such dislike of political parties on Guernsey, in fact, alongside island wide voting, they could bring some benefit to island politics which I find gives far too much scope to individuals with big egos and mouths to match. In their absence however, entities such as the “Group of Five” are welcome.
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Paul Le P
I agree. Organised opposition with a number of deputies pooling resources to come up with a more viable alternative will be much more effective at re-energising debates away from individual speeches slightly changing the phrasing of previous slight amendments.
Better still for the public if they understood what direction a politician was likely to take at election time instead of “oh they spoke well on such and such so I’ll vote for them.”
Party politics would take some time to bed in, I imagine, but the policy lines would then be much clearer, and it would force the politicians to actually get off the fence and pitch in.
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Organised.
Deputies.
Not two words you usually see in the same sentence ….. hell, even in the same paragraph ….
Next you’ll be expecting me to beleive that they are going to start making unpopular decisions in the best interests of the island …. and not turn around and reverse them in four years time …. (after they’ve debated and rejected the costly “expert” report and recommendations on the matter commissioned by the committe set up by the relevant department to investigate its possible future implimentation … )
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