He’s all for using our sister isle as a test bed for outrageous ideas, but Horace Camp laments a missed opportunity.
For some time now I have had this idea that we should in some way use Jersey as a test system for the outrageous ideas of our politicians on the basis that once we see how it works in a similar, though less desirable, economy to our own we would better be able to assess how it would work here.
There is one exception to this concept and that is any innovative ideas that will benefit our economy and are not designed to lead to a long-term or infinite requirement to bleed us poor taxpayers dry should be made live without any prior testing.
Back to the Jersey test system. We are already testing executive government, aka Project Action This Day, with the new hospital test pack and initial results were disappointing to say the least, and then all subsequent plan reruns turned out to be exponentially more disappointing. We are still reviewing why a temporary, and subsequently unnecessary, hospital could be built and dismantled during this time.
Our post island-wide voting review to determine how successful IWV is will also be assessed using the Jersey test system. We are getting Jersey to reverse their IWV system to a parish system to determine if it in anyway changes the efficiency of government.
However, a major opportunity has been lost. We have long known that the previous Public Service Direct Benefit Pension Scheme, the Platinum Plated Scheme, was far too generous and remained open for far too long until it was replaced by the Gold Plated Scheme years after the threat to future generations was discovered.
Unless some miracle occurs, the Platinum Scheme will run out of money long before it runs out of pensioners. The pensioners have nothing to fear as long as the Guernsey workforce is still able to cheerfully contribute to maintaining the payouts while at the same time contributing to a potentially worthless States pension for themselves and the secondary pension they are funding in an effort to have some sort of fiscally solvent old age.
It would have been so nice to see the impact of higher taxes and contributions to support a similar underfunded Platinum Pension Scheme in Jersey. Perhaps GST at 20%, standard tax rate of 30% and a window tax would have helped us devise our own plan to make up the deficiency of the employer of public servants making a complete hash of public service pensions.
But as is typical, those pesky Jersey people have muddied the water by borrowing half a billion pounds at nearly 3% a year, or £15m. a year in interest payments alone, to shore up their scheme. I’m not quite sure why but then I’m far too interesting to be an actuary.
My simple man’s view is that the States of Jersey, aka the Jersey taxpayer, is duty-bound to honour the scheme’s obligation come what may. Even if they can’t afford to eat or heat, they will still proudly contribute to the generous pension payments of loyal public servants who delivered them so much in the relatively short period of their life spent in work and assist them to enjoy the ever-increasing post work time of retirement.
Therefore, why take on an increased burden of £15m. in interest? Is it because they believe super inflation will wipe out the true value of the debt and in 30 years they will pay back good money with bad? Is it because they believe that using the £500m. to leverage (or gamble for those not familiar with financier slang) investments will make a fortune which will cover the obligations?
To find out, I would have to actually read up about the Jersey Bond and I think I over-exerted myself by doing a bit of research for my last column. But I fear, whether good or bad, the very act of borrowing a huge amount of money by the Jersey (I’m gritting my teeth as I type but I fear my editor may not be willing to accept the word I actually have in mind) Beans will only put the idea into the heads of our own dear (it has two meanings) politicians.
Borrowing to invest in income-producing infrastructure is one thing. Although I’m not sure that borrowing to invest in income-generating projects but in fact gambling with it in the stock market as we have already done can ever be justified. But an employer borrowing to shore up their own obligations to previous employees and getting its customers to effectively guarantee the loan is an extremely odd thing to do.
I’m absolutely certain I have misunderstood the whole rhyme and reason and basing an entire column on a headline in my Twitter timeline is not going to give the most insightful commentary. But my donkey senses (similar to spidey senses but reserved for Sarnians) are tingling and I’m fearing the worst.
Don’t be mistaken that I fear that Jersey is getting it wrong. They are big enough and ugly enough to make their own mistakes. No, my donkey senses are tingling because I expect it will be only a matter of time before we follow them down that route. Or Jersey doing it first could be a good thing, as our test system. Possibly, to use some unparliamentary language, it is a bonkers thing to do and our naturally slow and hesitant States, aka No Action This Day, will have time to figure out what Jersey is doing and observe if it turns out badly. And then, if history repeats itself, to do the very same thing with an as bad, if not worse, result.
And to Jersey I say beware the Dane because ‘if once you have paid him the Dane-geld, You never get rid of the Dane’.
I end with two points. One, hopefully a swot like Digard will delve into this with less flair but more detail. And two, how come I can’t remember what I had for breakfast but I can remember a Kipling poem I read at school?