Sunday, 22 February 2015

Be afraid, be very afraid... - Deputy Geoff Southern Guest Posting



The Chief Minister has a problem with his fiscal policy. The problem is an £80m shortfall in the 2015 budget. The Chief Minister would have us believe that the problem is one of excessive spending by a bloated, inefficient public sector. On the contrary, the evidence shows we have a highly efficient public sector workforce. The public sector workforce as a proportion of private sector numbers is as follows: Scotland 20%, Isle of Man 18%, Guernsey 17%, Jersey 13%.

The real problem for the Chief Minister and the island is that after 8 years of recession, both profits and wages have shrunk year on year, and with them, tax revenues. This has been made worse by the increasing use of insecure zero-hours contracts. Unfortunately, the Chief Minister and his colleagues, in order to get themselves elected, have promised not to raise taxes. This they cannot do without a further swathe of savage cuts to public spending and ultimately to public services.

The “guru” chosen to deliver these cuts, Mr Keen, has a track record in the private sector which needs scrutiny:

As CEO of Jersey Dairy, our guru’s response to cash-flow problems was to scrap home deliveries, (and school milk) and to make redundant over a dozen milkmen.

Then he moved on to Jersey Water where he saved costs through sacking the drain-digging team, and replacing their long serving workers with cheaper ones on much reduced terms and conditions.

At Jersey Post, far from taking the workforce with him, he bullied workers into accepting massively reduced pay and conditions by sacking them and making them all re-apply for their jobs. The result was a reduced workforce on reduced pay; butalso, critically, a reduced service (no Saturday delivery; reduced collections)

Most recently, we have seen Mr Keen use his methods on the Tourism department and yet again we see some 18 States employees laid off. Not one has been re-engaged with reduced terms and conditions on the new “Visit Jersey” team.

Here we can see the method. It is not rocket science. Sack staff; reduce wages; privatise or outsource to reduce conditions. The end result has always been reductions in the level of service, both in quantity and quality.

Of course it will not be the likes of Mr Keen, on £650 per day, who will suffer from this new round of cuts; it will be the most vulnerable in our society. We have already seen the start of this process with the introduction of sanctions against those with a disability and the scrapping of widows’ pensions. To the poor, to the sick and to the elderly in Jersey, I say “Be afraid; be very afraid.”

28 comments:

  1. 'after 8 years of recession, both profits and wages have shrunk year on year, and with them, tax revenues' -

    You are incorrect. Tax revenues (taken from the States accounts) for the last 3 years alone have been as follows:

    2011 £ 475 million (Plus Impots of £ 85 million)
    2012 £ 510 Million (Plus impots of £ 86.8 million)
    2013 £ 529.3 Million (Plus impots of £ 83.3 Million)

    States expenditure has also been as follows for the previous years:
    2011 2012 2013
    £M £M £M

    Health 170 175 187
    Education 104 103 107
    Social Security 164 165 182

    So we have rising tax receipts, and rising expenditure on Health, Education and Social Security.

    It may come as a shock to you, but if you have been involved with any business where there is a sudden 10% increase in costs in 1 year, questions do get asked, and remedial action is usually taken to ensure that this sort of increase does not reoccur. It's very easy to cry foul all the time, and repeatedly call for other politicians heads, but you should at least be honest about data if you are going to use it to support your policies.

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    1. The Corporate Services Panel and independent Fiscal Policy Panel (neither of whom have anything to do with Reform Jersey) say you're talking rubbish.

      I know who I believe.

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    2. So you are saying that the States accounts are incorrect ?

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    3. Just in case my previous message didn't make it through for some reason, here are links to the States accounts for the last 3 years.

      http://www.gov.je/Government/Pages/StatesReports.aspx?ReportID=1066
      http://www.gov.je/Government/Pages/StatesReports.aspx?ReportID=944
      http://www.gov.je/SiteCollectionDocuments/Government%20and%20administration/R%20Summary%20of%20financial%20report%20and%20accounts%202011%2020120903%20JMB.pdf

      Perhaps you could be so kind as to point out the error I have made in stating that we have seen rises in tax receipts, and spending on Health, Education and Social Security during the period ?

      If you are too busy to answer because of preparation for tonight's question time, perhaps you would care to provide an answer this evening ?

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    4. I realise that it feels uncomfortable, but it takes character to admit when we are wrong. Let's call this a test of character shall we ?

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    5. Forecast tax receipts are down and the population is rising (meaning individuals are contributing less tax).

      Even the Council of Ministers is now acknowledging this after PAC and the FPP have admitted it.

      Do you really want to be the last person in the Island left believing everything is hunky dorey?

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    6. Exactly my point - there was an attempt to increase taxes with increases in Social Security and now the Aged Care. People are now managing their Jersey tax affairs because increased taxes mean reduced tax receipts.

      I am not the only one either - see comments below, people will minimise their taxes when they believe that unnecessary taxes rises are going ahead.

      Sam, you have called for taxing higher earners, see what this does. Your comments confirm this is happening.

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    7. Your initial comment was not that 'forecast tax receipts are down' though was it ? It was 'after 8 years of recession, both profits and wages have shrunk year on year, and with them, tax revenues'.

      Forecast tax receipts may indeed be falling, but you are attempting to counter a point I didn't make.

      I don't believe I have stated things were hunky DORY (Another correction. Sorry). I've pointed out an inaccuracy in your assertions. This is symptomatic of politicians of all persuasions that instead of owning up and admitting 'yup, got that one wrong', you won't admit it and have to try and divert attention from your error ?

      People aren't contemptuous of politicians because they make mistakes. They are however contemptuous when they try and evade responsibility.

      The ball's in your court.

      Delete
  2. ANON - good points, that's for bringing facts to the case.

    Also, Southern is simply manipulating data to suit his arguments. The case of headcount (his percentages are based on this) ignores the actual issue, being labour costs. If he took the labour cost as a percentage of population between Jersey, Isle of Man and Guernsey - Jersey has the highest cost average of over £40k.

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  3. I guess you can't argue with the figures. I have always been an advocate of good housekeeping whether it be the States public sector or the private sector. Run the business as though it were your own is a good policy. Managers both in the public and private sectors have a duty to monitor outgoings and ensure incomings are adjusted to reflect the COL movement. Unfortunately we have the old chestnut of uncontrolled immigration to thank for our present predicament. However what I do find strange is that tax receipts have not gone up in proportion to the rise in immigration? Is it the case that we are allowing the wrong income earners into the Island and burdening ourselves with increased costs. Perhaps we should prioritise those workers who will provide added value to the ecomomy (ie greater tax receipts) rather than allow immigrants in who are taking the jobs at the lower end of the job market which could be filled by local people.

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  4. Tax receipts are down because the Finance Industry has been losing money and still is being hammered.
    Its a shame Geoff Southern can never offer to help this Industry in its hours of need.

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    Replies
    1. It's amazing how people can identify a problem and then blame the person who had least to do with it. If you're upset that finance is doing as well as we'd like, then how about blaming the people who are in charge instead of a back bencher?

      In fact, Deputy Southern has for years been ahead of the game on finance, arguing for FATCA before it was fashionable, and when our government was foolishly trying to dig it's heels in the sand.

      Geoff also led the opposition to Senator Bailhache's dangerous proposition in the States last year which would have seen us delay the implementation of a TIEA and send out a message that Jersey had something to hide and was a dodgy place.

      Finance will be held back so long as our political leaders insist that we keep swimming against the tide and not with it. Geoff has a long history of arguing that more tax transparency and global cooperation is what will make Jersey considered a safe place to do business and will draw us in more customers.

      Delete
  5. Stop allowing Maureen Morgan to wind you up.
    She slags you off on Facebook, JEP website and here and manages to get to you every time.

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    1. No she doesn't.

      She is the least intelligent political commentator that the Island has ever seen, is a habitual liar and a vicious cyber bully. None of that gets me!

      What does get me however is her regular targeting of vulnerable people. We have seen her already target the recently dead and their grieving parents, as well as others on Facebook suffering from mental illnesses.

      Delete
  6. http://jerseytoday.blogspot.com/2015/02/has-singapore-blinked-first.html shows modest tax increases on our wealthiest is possible.

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  7. Sam, do you accept that the cost of this Care Inquiry is going to have an effect on taxes and civil servant jobs?

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    Replies
    1. No.

      The Chief Minister has said that funding will come from reserves if necessary. Therefore no effect on taxes.

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    2. But those reserves are made from taxes and will have to be replenished.

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    3. We don't have to replenish reserves if we don't want to. I think even the FPP acknowledges that we can't expect to maintain the amount we currently have in it into the future.

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  8. Having worked for two large states departments as a full time employee, it is ridiculous to state without laughing out loud that Jersey has a highly efficient public sector workforce.

    Sorry Geoff, you are plain wrong.

    The other point is your expenditure figures when you mention The public sector workforce as a proportion of private sector numbers. Sorry you forgot to mention the ridiculous amount in cash that over six hundred States managers earn and other workers. No doubt there are some good ones lets try and be fair.

    Let me offer you some facts, the cost per year in public sector wages s/s and employer pension costs ( States) is now past £365 million for Jersey each and every year. How much Guernsey ? What we know is that for each of the 100,000 residents including non working women and children the cost is per person £3,650 only for wages - before the States purchase a lorry or nurses uniform complete madness.

    Mum Dad and the two kids therefore have a tax burden as a family in theory of £14,600 just to pay public sector employees wages who admittedly also pay tax.

    Let us not forget the Comptroller and Auditors report on the public sector efficiency on new building projects. Frankly dis-jointed and incompetent, they would not survive in the private sector, read it Geoff and see reality.

    Jersey for your international readers information, is only 45 miles in area - yeh unbelievable.


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    1. All of that is based on a subjective premise that you think the scale of public service we have in Jersey is too big.

      You're entitled to that view, but it is subjective, not objective, and so Geoff is not wrong.

      There is no right or wrong size for a public sector to be. That is simply a matter of values and priorities which change from person to person.

      Delete
  9. You seen this?
    http://jersey-evening-post.blogspot.com/

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  10. Sam.

    Bob.

    Letter to Treasury Minister from Chair of Jersey Child Abuse Inquiry FRANCES OLDHAM QC.

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  11. When are they putting up written questions and answers on the SOJA website?

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    Replies
    1. Q's and A's are up.

      Delete