Treasury Minister outlines plans

by GD on Wed 07 May 2008, 8:13 pm

Deputy Charles Parkinson was elected the Minister for Treasury and Resources unopposed in the States yesterday. Today he released to the media his priorities for the next four years.

Statement from Deputy Charles Parkinson, Minister, Treasury and Resources Department

My key priorities as Minister of Treasury and Resources will be:

Fiscal Policy

I want to review the tax and social security system, with a view to formulating policies to protect lower and middle income families from the burden of zero-ten. This will clearly involve close liaison with the Social Security Department, with which T&R will work increasingly closely.

Secondly, I want to establish a fiscal platform which will encourage the development of the island’s renewable energy potential. T&R is likely to find itself charged by the House to investigate energy taxes and carbon taxes, as a means of funding energy efficiency incentives and the work of a Renewable Energy Commission. This will be a challenging task, but essential to the future of the island.

In terms of the administration of the tax system, I intend to bring about a consolidation of the Tax Laws, which have become a confusing mass with layer upon layer of legislation. In the process, I propose that any guidance which is intended to be capable of being relied upon in a court of law should be codified in legislation. Statements of Practice should be just that – guidance which is not legally binding.

Capital Investment

It is clear that the island faces demands for capital investment, at the airport, the hospital, in our schools and harbours, which it will not be possible to meet from our revenue income. Major decisions will have to be made on the funding of such investments, and Guernsey may have to become a borrower for the first time in many years.

I intend that the Department will maintain a rigorous control over major capital projects, both construction projects and IT projects, to ensure that there will be no more overspends. Nothing has been more damaging to the public’s confidence in the States than the long procession of poorly managed projects where in some cases the final cost is still not known.

Economic Policy

I believe that States members need better information to understand the island’s fiscal and economic performance. I intend to introduce a quarterly bulletin containing factual economic and fiscal data, and sensible commentary thereon, to enable States members and the public to understand what is going on in our economy, and to appraise whether the fiscal and economic strategy is working.

Accounting Policies

I want to see the States accounts move towards normal accounting standards, so that they become meaningful and reliable. This will necessitate a huge amount of work, especially in terms of accounting for fixed assets, but unless and until this work is undertaken, all financial policy decisions will be taken in the light of unreliable information.

Property Management

Properly recording and accounting for property holdings and transactions will enable us to effectively manage the States substantial property portfolios. A good start has been made in compiling a register of the property owned by the States, but this needs to be developed into a complete tool for the evaluation and management of our properties, including planning life-cycle maintenance routines.

Management of Investments

The States owns substantial financial assets, particularly in the States employees pension funds and in the Contingency Reserve. Having been involved in the investment business for many years, I take a keen interest in the management of such assets, and will ensure that the funds produce the best possible return for an acceptable level of risk in the prevailing investment climate.

Trading Companies

The States owns Guernsey Electricity, Guernsey Post and Aurigny, and T&R is the shareholder in these entities on behalf of the States. Each of these faces difficult issues going forwards. In the case of Guernsey Electricity, the States directions on pricing and energy sources are likely to change during the term of this House. Guernsey Post faces challenges to a business plan which depends heavily on the ‘bulk mailers’, and the problems faced by airlines in the form of rising fuel costs, action against carbon emissions, airport charges etc are manifest. It will be our job to guide these entities through some choppy waters.

Altogether, there is a huge amount of work to be done, and I intend to bring together a multi-talented team to make it happen.

The next four years are likely to unusually challenging for the States and the island, but I look forward to helping to resolve the problems and remain confident in Guernsey’s future.

Deputy Charles Parkinson, 6 May 2008