Another warning that was dismissed from August 2008. ACHIEVING A BALANCEComment by Roger Bale.
Offered to readers of planetjersey with Roger Bales full permission.
THERE are only three things the States can do which people individually, collectively, corporately or co-operatively cannot do better themselves.
These are defence (ie the protection of our borders, including island sea defences); Law and order (including courts and prisons); and the enactment of legislation to ensure fair play.
The States have the legal right to raise taxation and Jersey residents have a legal obligation to pay these tax demands. But in recent years the States have turned Parkinson's Law (Expenditure rises to meet income available) on it's head, by ever increasing tax demands to cover expenditure commitments which are proposed, but not limited to income. The more money the States sector absorbs the greater the taxation required to fund it. MORE PUBLIC MONEY PUT AT RISK
Do we want more public money put at risk and made hostage to projects which should clearly be in the private sector? Why not let the private sector have the risk and the losses, and let the revenue have its 20% of the profits?
Few people entering the States are qualified experts able to take decisions
with other people's money (yours and mine). To contract and engage in activities and capital expenditure is far better left to the private sector.
The Jersey States could pioneer a world first, if they said that the long term objective of States policy was to have a balance sheet with no uncovered liabilities and few or no fixed assets. Tax revenues would be brought into balance, states expenditure and the whole budget would be capped at some where below the latest figure of £480 million for 2007 expenditure, which I read was 88% higher than the £225 million spent ten years ago.
By owning assets, the States need to employ countless civil servants, many of whom are better educated, and with more skills and experience, than the politician to whom they answer. It is widely believed that some civil servants run rings around the elected people's representative, to whom they answer, thereby creating for themselves ever-growing empires. They are not subject to market force disciplines and can call for ever increasing budgets to fund inter alia their departments increased salary requirements.
If I am wrong? Why is it that the remit of the JCRA (the competition watchdog) does not include States monopolies? Whenever we read of the costs, charges or staff ratios of these, in comparison with their equivalent in say the UK, the results are adverse.
With GST we are all taxpayers now. Do we need to have ever increasing sums of money taken from us to pay for salaries, office accommodation and the ever-growing number of civil servants ? The sum of £33 million plus is being paid to just 464 of them!
The States do not need to own offices,car parks etc, The States do not need to own the airport or harbour's which the island needs. The States do not need to own a hospital, but they do need to ensure that every Jersey resident is entitled to access without charge to a hospital and medical care. The States do not need to own schools; they need to ensure that every child resident of the island is properly educated, regardless of the means of the parents.
Start with the simple things: car parks, for instance. These are a natural investment for pension funds and could readily be sold. There could be a condition of sale of any States asset that people employed in that asset are taken on by the new owner on terms equal to their current employment the new owners would factor this cost into the purchase price. Jersey residents will benefit from lower costs from hitherto States owned (and over staffed?) facilities and the end of a de facto parking monopoly.
What, then, to do with the proceeds of sale of assets and revenue above the expenditure cap? Firstly the pension scheme for States employees should be closed to new entrants and subject to an actuarial review with the object that these pensions should be fully funded. New States employees should thereafter be recruited on the pension terms now current in the private sector. Any States employee, whose occupation is transferred by sale or ceases employment, takes with him a fully funded pension entitlement, thus equitably ending the present anomaly that the majority of the population will be taxed to provide a minority with retirement benefits which they, the taxpayer cannot enjoy. DISTRIBUTED BACK TO THE POPULATION
The proceeds of the sales, after fully funding existing pension obligations, should be distributed back to the population. This is the only way that these proceeds will not find their way into some politician's pipedream, like the recently suggested non-viable tramway. Refunds can be delivered by a mix of rebates, raising tax thresholds, reductions in GST and impot duties etc.
Unless a budget ceiling is set and the objective of returning tax paid to taxpayers is embraced, the continuing growth and encroachment by the States sector is endanger of overwhelming the private sectors ability to generate enough employment and revenue to ensure Jerseys continued prosperity.
Roger Bale has had a corporate association with Jersey for 40 years and lived in the island for almost 30. A keen supporter of enterprise and entrepreneurial activity, in recognition of which he was awarded an honorary doctorate of business administration in 2003, he cares passionately about Jersey's finite resources and their protection.
An example maybe ? reply 35http://planetjersey.co.uk/forum/index.php/topic,585.msg12389.html#msg12389