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Read this if you dare

Post by GD on Fri 11 Nov 2011, 5:05 pm

Jersey's public finances are a horror story.

The 18+ rating comes from the Public Accounts Committee who say spending last year exceeded income by a massive 229 million.

And, cue thunder claps and lightning, the public sector pension scheme is in deficit to the tune of a numbing three-quarters of a billion pounds - 241,744,000 in respect of the Teachers' Pension and 526,245,000 in respect of the other public employees scheme.

Committee chairman, Senator Ben Shenton, warns that pensions must be cut. Balancing the books would wipe out the island's entire Rainy Day Fund.

He says islanders are perhaps under the false impression that Jersey's finances are balanced and in good order. Not true, he says, pointing out that in 2010, operating expenditure was 935.9 million which exceeded exceeded total revenue - 745.7 million - by about 190 million.

Add to that, says Shenton, other costs such as depreciation and the deficit increases to 229 million.

In what is a farewell report from the Senator - he has quit the States - he says the PAC believes that unless there is a swift realisation and acceptance of the severity of the problems facing the Island, then the long-term financial consequences may be dire. He believes the island is likely to have to start borrowing cash to pay the bills.

The Senator also shines light on the public sector pension scheme: "Despite numerous warnings over the years we now have a situation whereby the Public Sector Final Salary Pension liabilities are significantly larger than the Rainy day Fund (Strategic Reserve), liabilities that exceed one year's total income.

"Elimination of this deficit may require extreme generosity by the taxpayer towards the public sector employees. If this is the case, there is no doubt that some offset in employee terms and conditions will be required.

"With expenditure exceeding income in 2010 by 229 million, a massive pension fund deficit, some public sector employees being paid significantly more than their UK counterparts in some areas, and a CSR savings programme where many savings are
just the utilisation of different funding streams (taxpayer pays), this report should perhaps have been given an 18 rating and filed under the category of horror.

"Whilst the PAC agrees that it is wrong to talk down the economy, it is also conscious of the fact that corrective measures are unlikely to be taken until the depth of the problem is recognised and accepted. The mis-management of the Public Sector pension liability, and years of denial that a problem exists, has led to a situation whereby the long-term liability of the taxpayer exceeds the rainy day fund. Islanders should be under no illusion that a deficit of one thousand million pounds is a serious matter. The level of necessary belt-tightening by all, and particularly the public sector, will be painful and unpopular. It won't be helped by self-interest organisations refusing to accept the severity of the problem.

"Through neglect and incompetence we have a public sector pension that is not fit for purpose and an administration that has preferred to spin that no problem exists rather than deal with it.

"The PAC is also of the opinion that the imperfect implementation of Ministerial Government could have negative economic consequences for Islanders. The lack of a holistic approach to overall spending and the role of government coupled with a lack of
collective responsibility, at both government and executive level, is of significant concern.

Areas of the public sector are extremely expensive on a comparable basis with the private sector and it is questionable whether the public will continue to pay higher taxes to fund inefficiencies and unrealistic pension packages."
(from CTV)

......THE BOSS......

"Always be yourself because the people who mind don't matter, and the people who matter don't mind"


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Re: Read this if you dare

Post by Thistle on Fri 11 Nov 2011, 6:00 pm

so even with jersey people being stung by gst they still cant balance the books xx

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