When is the right time to borrow?
JUST as the best time to plant a tree, or start pension savings, is always 20 years ago or more, so the right time to go to market to borrow, certainly for the States of Guernsey, was almost always some other time.
Not the times of double-digit inflation obviously, but plenty of deputies will now beat the drum that borrowing today is ill-advised, while borrowing yesterday was effectively printing free money for the exchequer.
Although clearly interest rates and borrowing have never settled back to where they were before Liz Truss’s disastrous and short-lived premiership, there was a time, not so long ago, where borrowing was more attractive.
But was the States in a position to take advantage of it?
P&R Treasury lead Deputy Mark Helyar says not. He says that borrowing ‘for the sake of it because interest rates were low’, would not have been a wise move, especially with no real plan on what to spend it on, and no plan to repay.
The public, and probably a majority in the States, remain concerned about borrowing full stop.
However, with a long wish list of capital projects to fund, it seems inevitable that Guernsey will look to borrow in the future, but once again islanders will want much more clarity and scrutiny on the why, the how, and the how much.