Tuesday, 17 November 2015

"Our failing government system" unedited letter to the JEP


The unedited version of my latest letter to the JEP on our failing government system -


As I read the JEP coverage of Senator Maclean’s new idea to tax foreign companies trading in Jersey I couldn’t help but feel a sense of déjà vu. Haven’t we been here before?

I remember in September 2008, when I was 17 years old, sitting in the hall at Hautlieu School for the senatorial hustings hearing Alan Maclean and the other ministers giving exactly the same platitudes they are giving today. 7 years and 3 elections later and we are still not an inch closer to a solution to our tax problem. In fact, things have steadily gotten much worse under these ministers’ leadership.

How long are Islanders prepared to put up with election after election of candidates coming forward with all sorts of nice statements like “I’ll find a way to tax foreign companies”, “I’ll support moves to take GST off of food” or “I’ll oppose the development on the Esplanade” only for those candidates to break every one of those promises and expect to get re-elected 3 years later by just repeating the same lines again and hope the public have forgotten all about it?

Sadly this is what inevitably happens when we have a system of so-called “independent” candidates who can get away with simply saying whatever it takes to get elected, then go ahead and do whatever they wanted anyway.

Deputy Vallois made it clear when she resigned that she doesn’t believe the ministerial system can work without party politics, and she is absolutely right.

Some who don’t like the idea of parties might therefore suggest that we go back to the committee system. But of course the problem there is that it was the committee system that dreamt up the 0/10 tax system which has caused this £145m black hole in the first place!

Whatever your views are on Reform Jersey’s particular brand of politics, it is clear that the Ian Gorst-led government is failing this Island and has been dishonest at every step of the way. Islanders who are more ideologically aligned with Gorst’s brand of conservatism (as opposed to Reform Jersey’s social democracy) should demand better from these people.

We need a system where competing visions for the Island contest power with comprehensive packages that have been subject to consultation before the election and which they are ready to just get on with and implement if they are elected to government. We spend far too much time talking and not enough time doing. Full party politics would streamline our government system and produce better results.

Gibraltar is currently having a general election where the main parties have produced manifestos of over 50 pages, analysing every detail of the current government’s record and providing all the minutia for their plan for the next 4 years. The best vision will win and Gibraltarians will get what they voted for.

If a rock with only 30,000 people can do it, Jersey with 100,000 people can do it even better!


Deputy Sam Mezec, Chairman of Reform Jersey

17 comments:

  1. You have gone awfully quiet since the majority of Jersey are anti-your initial views on the refugees. This proves you only play dog-whistle politics, because there is no chance you would hang your neck out on principle like the Chief Minister is doing. This is the reason why people wont' vote for you -they can't respect someone who doesn't stand on principle.

    Even in the UK politicians from opposing sides will support their opponents when they take a position.

    You are conspicuous by your absence - why aren't you out there supporting the Chief Minister? Or is this the evidence we need of you playing dog whistle politics? you should be ashamed of yourself!

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    1. You're obviously not a regular reader of the JEP, listener of the BBC or watcher of ITV. I'm virtually never off one of those platforms.

      This includes a recent radio appearance where I did precisely the opposite of what you're accusing me of now. I made it perfectly clear that I 100% support what the Chief Minister is trying to do and, so long as his proposition matches what he is claiming it will, I will happy speak and vote in favour of it.

      It isn't conducive to good political debate to make stuff up to suit an agenda like you are doing.

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    2. YOU ARE A LIAR!

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  2. Never trust a person who says they never lie!

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  3. A liar is a person who lies. You said you are not a liar, therefore you do not lie. Simple syllogism, even for someone as daft as you.

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    1. Do white lies count? I've never lied in politics. Good on you for the insult though. Must make you feel great doing that behind anonymity. Big man.

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  4. Saying that our government are failing is a glib response to a complicated and fluid set of global and local conditions.

    Zero ten was introduced to protect certain parts of the finance industry, and to ensure that our largest employer, and tax payer, remained a viable proposition in the face of tougher regulatory conditions. Without that change to the tax regime, large swathes of business would have simply departed for other offshore centres, leaving us with an immediate deficit, and large scale unemployment. That earnings and thus tax receipts have fallen only moderately in the wake of the worst financial crisis since the great depression is actually testament to the success of Zero ten, and the resilience, quality, and innovation of the finance industry.

    The projected deficit is largely attributable to massively increased levels of capital expenditure in forthcoming years on such things as health and education, rather than structural failings in the way residents are taxed. If one were to strip out this expenditure, the deficit would be reduced significantly, to a level which was largely attributable to a continuing rise in the cost of running government, and a fall in the contribution paid by the finance industry and its employees because of a decline in profits, largely associated with a shrinking interest margin because of the extended period of low interest rates.

    I realise that Reform's answer to the deficit is to suggest taxing middle to high earners more, and that may well be a valid suggestion. The inference however that many people seem to be keen to extol is that the wealthy are not paying their share, however as you will know from your recent FOI request, the tax rate paid by those earning, on average, over £ 100K is actually a much higher rate than those earning on average below £ 100K, and indeed, the islands top earners are presently paying over £ 300K per annum each on average. You may, through your proposals, feel comfortable jeopardising the presence of these people continuing to decide to live in the island, others aren't. I, as you will no doubt infer, am one of the ones that believe the loss of one single high tax payer (and the required arrival of 50 or 60 new 'average earners to replace the revenue lost) is not a risk worth taking, especially when the deficit is largely not structural in nature.

    As to political parties, I believe anybody is allowed to form their own party in the island and to present their mandate to potential electors. (As you have successfully done). One only has to look at recent events in Greece or the UK to understand that candidates standing on a party basis is in no way a guarantee that electoral promises get fulfilled. I may be mis-understanding your letter, but are you suggesting that 'only' representatives of a political party should be eligible to stand in the future ? That does seem to be quite a draconian step ?

    Enthusiastically encouraging the public to believe that the island's leaders are failing, rather than struggling to cope with difficult global and local economic conditions, is of course a political strategy to try and increase Reform's support base, however, as our most recent election results demonstrate, the vast majority of the island continue to believe that our present incumbents are actually trying their best under difficult circumstances, rather than, as you insist, failing.

    I realise that you will take issue with a lot of my comments, but there are always two sides to every story, and nobody has a monopoly on the right answers.

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  5. "Zero ten was introduced to protect certain parts of the finance industry, and to ensure that our largest employer, and tax payer, remained a viable proposition in the face of tougher regulatory conditions. Without that change to the tax regime, large swathes of business would have simply departed for other offshore centres, leaving us with an immediate deficit, and large scale unemployment."

    Totally agree.

    "That earnings and thus tax receipts have fallen only moderately in the wake of the worst financial crisis since the great depression is actually testament to the success of Zero ten, and the resilience, quality, and innovation of the finance industry."

    That things aren't even worse than they are may well be because of the high quality of the finance industry we have here, but certainly not to zero-ten. Zero-ten created a blackhole which was initially filled with a 3% GST, later found to be inadequate so raised to 5%. Those moves may have been unnecessary if the government had found a way around zero-ten that still maintained the essential exemptions to protect the parts of the finance industry which are dependent on a zero rate to be viable.

    "The projected deficit is largely attributable to massively increased levels of capital expenditure in forthcoming years on such things as health and education, rather than structural failings in the way residents are taxed."

    Not true. Capital spending isn't included in the budget deficit figures (quite rightly). The deficit is structural, based on paying the bills as they currently stand (or need to be to meet inevitable increasing demands).

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    1. "If one were to strip out this expenditure, the deficit would be reduced significantly, to a level which was largely attributable to a continuing rise in the cost of running government, and a fall in the contribution paid by the finance industry and its employees because of a decline in profits, largely associated with a shrinking interest margin because of the extended period of low interest rates."

      If the investment spending for demographic changes is exempt, then you are partially right, but there are other important factors too. A significant portion of the deficit is from a massive increase in welfare payments. Under this government unemployment in Jersey reached the highest it's ever been (that's people claiming benefits and not paying tax) as well as reduced working conditions for many, including a proliferation of zero-hours contracts much higher than the UK which leaves a lot of workers as less confident consumers.

      "I realise that Reform's answer to the deficit is to suggest taxing middle to high earners more, and that may well be a valid suggestion."

      No, our income tax policy would see a higher rate which would only apply to the top 4.5% of Islanders. Not the middle.

      "The inference however that many people seem to be keen to extol is that the wealthy are not paying their share, however as you will know from your recent FOI request, the tax rate paid by those earning, on average, over £ 100K is actually a much higher rate than those earning on average below £ 100K, and indeed, the islands top earners are presently paying over £ 300K per annum each on average."

      It's not an inference I make.

      They do pay a share. I just think the share should be higher, given the drastic changes we've seen over the past decade of taxes away from businesses and onto people, often at the lower and middle end (GST and 20 means 20).

      "You may, through your proposals, feel comfortable jeopardising the presence of these people continuing to decide to live in the island, others aren't. I, as you will no doubt infer, am one of the ones that believe the loss of one single high tax payer (and the required arrival of 50 or 60 new 'average earners to replace the revenue lost) is not a risk worth taking, especially when the deficit is largely not structural in nature."

      The deficit is structural though.

      Also there is no evidence it will put people off coming here. Singapore just raised there top rate of tax to above 20%. The Isle of Man used to have 18% and recently raised it to 20%. They haven't experienced any major problems as a result.

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    2. "I may be mis-understanding your letter, but are you suggesting that 'only' representatives of a political party should be eligible to stand in the future ? That does seem to be quite a draconian step ?"

      That's not what I'm suggesting.

      "however, as our most recent election results demonstrate, the vast majority of the island continue to believe that our present incumbents are actually trying their best under difficult circumstances, rather than, as you insist, failing. "

      No it doesn't. 70% of the electorate didn't vote. As it happens, that 70% figure is the same proportion that the Jersey Annual Social Survey said did not have faith in the government of Jersey. Bit too much of a coincidence for me.

      "I realise that you will take issue with a lot of my comments, but there are always two sides to every story, and nobody has a monopoly on the right answers."

      Indeed. In fact I think I'm proposing a solution which will benefit my political opponents more than it will me.

      I hope you'll be gracious enough to accept that your understanding of the deficit was incorrect though.

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  6. You are drawing a long bow there in relation to the 70% who didn't vote are apathetic. I didn't vote simply because I am comfortable that the outcome will be exactly how I want it to be (which is what happened). I, like many others don't NEED to vote, because the majority of islanders that do vote represent the majority of islanders, which is clearly a conservative preference across the board.

    Even if you had political parties, Reform Jersey would be irrelevant, as there would be centre-left, centre, and probably two conservative parties, with Reform Jersey being the only left-wing party. You will still be left with no Senators, and made to look even more irrelevant than you are now.

    Finally, no company registered for GST (finance or otherwise) pays GST, as a registered company that pays an invoice with GST on it gets it refunded - it is only the final consumer that pays GST. Not sure if you believed that finance companies were getting away with not paying GST unlike other companies, but finance companies are exempt not from paying it, but from charging it - because if they were to pay it, then they would simply register and have it refunded like mine, and many other companies on the island.

    Matt B

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    1. didn't say anything about apathy. I spoke of voter abstention and dissatisfaction with the government. They aren't the same thing. 70% of the public were not satisfied with the government in the last survey carried out. It really isn't wise to pretend that you know better just because you're content with a government which is screwing the poor.

      How on Earth do you figure that that would be the conglomeration of parties we would have? That's a bit presumptuous. Maybe we'd only have two. And Senators would be irrelevant because if Gorst and co form a party, their policy will be to abolish Senators. Senators will be gone in the next ten years. Also, in case you didn't notice, there are more Deputies than Senatoes and Constables combined. It's perfectly possible to be relevant without Senators. You're just using Jon Howarth arguments now.

      Lastly, I didn't say anything at all about companies paying or not paying GST.

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  7. Casting aside these excuses, Politicians who believe they speak for the people stand in the Island Wide elections.
    Most Senators would never drop down to Deputy and if they did it would only be because they know their popularity is waning.
    You are only a deputy and therefore cannot talk for people outside of St Helier Number 2 because nobody outside that district had the choice of voting for you.
    No Deputy can act like they speak for all voters, it's a ridiculous assumption to make.

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    1. You clearly have no understanding of Jersey's political system.

      If you think that the current Senators are popular and speak for the Island, then you must be deluded.

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  8. Ah, threats of violence now. The police will enjoy that.

    Btw, PPC don't accept anonymous complaints. You have to verify your identity and the person being complained about gets to see it, as well as their contact details.

    That'll be enlightening!

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