HERE we are in 2010 and, politically, there’s a tough year in store. Over the next 12 months there will be very many difficult and unpopular decisions for our deputies to take. My New Year’s resolution is to give them an easier time – and just like cutting down on red wine, I’m unlikely to stick to it.

Let’s take a look at the challenges the States face this year. The biggest must be bringing the island’s budget back into balance. With a projected deficit of £42m. for 2010, that’s a daunting task. The zero-10 strategy was needed at the time, but in retrospect it couldn’t have gone much worse. It was predicated on historic growth levels and instead the world economy hit a landmine.

Then, having created a financial headache for ourselves, Guernsey is told the strategy is no longer acceptable. It follows the letter of the EU code but not the spirit.

Getting the replacement tax strategy right is going to be tricky. Yes, a corporation tax of circa 10% will help fill the black hole, but not if it results in an exodus of business. It’s the biggest task the States faces at the moment and must be done carefully, working hand in glove with the other Crown dependencies.

Already I worry that the States might have gone off half-cocked by voting to bring in a corporation tax at a presumed rate of 10%, while our competitors kept their powder dry. I suspect all three jurisdictions will end up with similar policies, but business can be lost by committing too early.

It is hard for those outside the corridors of power to understand exactly why Guernsey did that. Following my New Year’s resolution, I’ll presume there were good strategic reasons and it wasn’t done just to placate a critical HM government.

Another difficult area for States members this year will be handling the backlash against inevitable service constraints. The public will be shouting in one of their deputy’s ears, ‘Spend less money’, but in the other, ‘We didn’t mean you to cut back on that, you fool.’

It’s easy to support reducing spending on areas that don’t affect us personally, but every public service is vital to someone and so every cut will raise strong passions.

Even spending reductions that don’t threaten the quality of public services will be hard to achieve in the face of public hostility. What are the odds of the Policy Council having the courage to tackle the ludicrously generous taxpayers’ subsidy to the island’s private schools? This has been highlighted by Tribal as a potential saving but to achieve it the States will have to face down an angry and articulate lobby made up of middle- to high-income earners. They’ve rarely had the stomach to do that before and I doubt they will this time around.

A dispassionate person looking at Guernsey’s public finances would also conclude that there is an overwhelming case to increase taxes. Indeed, they would raise an eyebrow at the lack of action in last month’s budget. The defence was that a firm decision on corporation tax was needed before other measures could be evaluated. By the next budget that decision will have been taken and you can expect other tax increases as a part of the package for 2011.

Other States predictions for 2010?

Well, expect the battle lines to harden over the pros and cons of cabinet government. The issue will come to a head this year, with the outcome difficult to call.

Will cabinet powers ensure ‘joined-up government’ in a non-party system? Did Senator Ozouf get his tax proposals through the Jersey States? Has that island achieved real direction after 60 days of States debate last year?

There’ll be a lengthy, passionate debate on the 11th-hour attempt to overturn the States’ decision on waste disposal, but it will probably fail.

Finally, 2010 may well see the first collapse of a departmental board in the current States.

As pressures mount in straitened circumstances, so will the likelihood of political implosion. On that basis, HSSD must be one of the leading candidates, as that is where the pressure is greatest.

To cope will require selfless and sensitive team-working by its members. Does that esprit de corps exist?

However, if a week is a long time in politics then a year is an eternity, and predicting the future is a mug’s game.

Just ask the zero-10 implementation team.