No-one’s fault, but this is a challenge for all

INITIALLY it was decided by someone – and then quickly disputed – that Guernsey’s more elderly islanders were ‘to blame’ for tax rises.

Now the attention moves to the ‘work-shy young’, as identified in yesterday’s letters page. Some of the wording may have been rather extreme, and the credibility of the argument is thin, but the point would have resonated with some.

While life expectancy has changed much for the better in the past 40 years, thereby causing a problem for the overall sustainability of the old age pension, the contributions period for working islanders would have also changed significantly over that time.

As school-leaving age has steadily increased, and university become more popular for young islanders, time spent building up a social security contributions record has changed.

Maybe as little as 40 years ago we could expect most of our young people to be starting full-time work aged 15 or 16. Now a meaningful contribution record might not be established for many until well past their 20th birthday.

This exacerbates the issues facing Guernsey insurance funds. Fewer contributors, and more to pay out, creates an obvious deficit.

But there is no-one to blame here, bar demographic trends. Guernsey’s baby boom of workers are now largely retired, their children, who had to be accommodated in extra schools built in the 1960s and 1970s, will follow them in a decade or so. Meanwhile birth rates are low and thoughts about a significant shift in population policy is being resisted.

Which reinforces the need for the States, with the ongoing tax review, to urgently and significantly restructure social security rates, limits and contributions.

The ongoing issues for social security also demand a review of population policy as part of future work on the tax review.

Population policy is not expressly mentioned in the propositions within the green paper report, but although the baby boomers population bulge will pass in due course, the issues for state benefits caused by longevity will not.

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