Budget delay could be down to tactics

A WHILE ago I warned that 2013 was likely to be the year when our new deputies’ promises on resisting increased taxation while still protecting public services were likely to prove hollow.

A WHILE ago I warned that 2013 was likely to be the year when our new deputies’ promises on resisting increased taxation while still protecting public services were likely to prove hollow.

Of course, they meant what they said in their manifestos and at the hustings – in an aspirational sense.

The problem is the figures just don’t add up in the real world. So all that positive rhetoric that candidates wrapped themselves in at election time will turn out to be nothing more than the emperor’s new clothes.

That’s one of the problems with a non-party-political system.

There are no comprehensive tax and spending programmes being put forward which can be scrutinised by financial experts. Instead, pious hopes from 80-odd individual candidates who can always blame others for being unable to deliver on their election promises.

Why do I bring this up again now? Because I worry about the reasons why the Treasury and Resources Department has delayed its Budget for next year. I have no inside track and could be totally wrong, but for what it’s worth I’ll speculate on their reasons.

Firstly, they’re desperately trying to achieve buy-in from key departments – particularly Education and HSSD – for significant, real-term budget cuts. Those two departments will be warning that the first draft Budget would mean deep cuts in key public services which would be hard to deliver. Those difficulties would be both practical and political. Guernsey is not a community used to having important services taken away and the public backlash would be significant.

At the heart of T&R’s concerns will be the worry that a department might break ranks and propose a Budget amendment to increase their allocation. Such a move would be sold by the department concerned as an attempt to allow the whole States to make an informed choice, knowing what the consequences of big cuts might be.

If they supported T&R then all deputies would be effectively signing up for the inevitable service reductions. But T&R’s worry will be that any Budget amendment put forward by a minister would signal the end of the Policy Council’s unofficial collective responsibility, which has been almost spookily observed thus far.

As part of their behind the scenes attempts to see off such a revolt, T&R are bound to be looking at the other side of the equation as well. How far can taxation be increased to provide extra revenue and placate the spending departments? Are there any new charges which can be slipped in to increase revenue without scaring the horses by cranking up the traditional tax base? How soon does Guernsey really need to balance its book? Can’t we run a deficit Budget for a few more years using cash from the rainy day fund?

It’s all a million miles from the positive spin which surrounded the early stages of the Financial Transformation Programme or even what we were being told at the election just a few months ago.

Of course, I could be totally wrong about the reasons for the Budget delay. We will find out in a month or two. But as someone who never normally bets, I am willing to venture 50p on not being far from the truth.

All this means that we (and our deputies) should scrutinise very carefully plans which were announced on the same day as the Budget delay. We’re told that island-wide kerbside recycling will be introduced in 2013. Fine, so long as it doesn’t cost significantly more than our present system of waste collection / bring banks for recyclables.

I’m certainly not against having my recycling collected from my door. Who would be? But if that convenience comes at the cost of someone losing out on the medical or social care they require then I’d rather struggle on with the current system. So if the change is cost-neutral – fine. But if it costs a couple of hundred thousand pounds more then please give that cash to Health or Education instead.

Would that undermine the waste strategy, which relies on increasing recycling? I don’t see why.

After all, the lengthy trial of kerbside recycling saw almost no change in recycling rates. In contrast, it’s almost certain that a ‘pay to throw’ scheme for mixed waste would have far more impact, cost less and be much fairer.

Certainly, all new initiatives must now be judged not only on whether they are good in their own right but how they impact on Guernsey’s distressed Budget.