Cash chickens have now come home to roost

There is no magic money tree, anywhere up to £132m. of new but un-financed spending approved by previous Assemblies, plus a declining workforce to pay taxes as the population ages, means public sector finances have hit the buffers.

Policy and Resources’ presentation yesterday of a five-year baseline forecast showed how dire things are, a shortfall each year of around £1,300 per taxpayer.

Attention, unsurprisingly, is now turning to redress these £50m. per annum deficits – tax rises, service cuts or economic growth or a mix of all three.

There will be a temptation in some quarters to shout down the financial case made by P&R as over-egged and worse-case. The reality, however, is that Guernsey cannot have it all and remain a (comparatively) low-tax jurisdiction.

This newspaper and others steadily made this point over the years while previous States insisted the economic laws of gravity did not apply to them or their social policy aspirations.

P&R president Peter Ferbrache yesterday declined to agree when questioned that past administrations had been negligent and preferred instead to look forward.

That is understandable. Digging the island out of the hole others have created will take a united approach, creativity and – since public service reform is an essential element here – a partnership approach to reducing the cost of government.

It will not be easy. About two-thirds of what the States spends goes on pensions and benefits plus health and social care. That, clearly, is where the biggest savings are to be found but in the most politically sensitive of areas.

Education and policing and border security are the next biggest and equally sensitive.

Inescapably, this issue comes back to what it should have been years ago – what are the island’s priorities, what do they cost and perhaps more importantly, what do they achieve?