Judging by his column in Friday’s [27 June] Press, not only is Horace Camp a structural deficit denier, he is proud of it.
He celebrates the £350m. growth in reserves shown in the States’ audited 2024 accounts. But £254m. of it is actuarial sleight of hand (increasing the discount rate on the defined benefit pension liability from 4.5% to 5.6%). In fact ‘other gains’ of £128m. shown in calculating the surplus for the year of £20m. cannot be taken for granted. These fluctuate wildly from year to year and will disappear once we have spent our reserves on the capital investment we need. Without this the surplus would be a deficit of £108m.
Horace dismisses depreciation of £61m. in the accounts as an irrelevance. In fact it is a good proxy for capital spending. The amount actually spent during the year was £72m. (note 18 to the accounts), a creditable 2.1% of Guernsey’s GDP. We should be investing at least this much in infrastructure every year.
So how big is the ‘black hole’ according to these latest accounts? Deficit before ‘other gains’ £108m.; deduct one-off tax rebate to that bank of £23m.; add amount by which capital expenditure exceeds depreciation £11m.; answer £96m. per annum.
Horace says the truth is that Guernsey is not broke. It will be soon.
Your other columnist Dr Andy Sloan is right. It’s not a question of GST-plus or Pillar 2 or zero-15. We need them all.
Andy Offen
Vale
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