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One of Jersey's top politicians will fight for his political life today, as a damning report on his Budget proposals coincides with a vote to strip him of his Ministry. And later this evening, Treasury Minister Senator Philip Ozouf will finally confirm if he is to ask voters for another term in office.
It comes just twenty four hours after a States report on the Budget describes the proposals as the "calm before the storm". The core issue centres on the Island's recent income tax forecasts which were tens of millions of pounds lower than expected when the main States financial plan was agreed in 2012. At the time, those forecasts were challenged by other politicians as being overly optimistic, but were described by Senator Ozouf as "robust".
However the proposed Budget for next year reveals that actually they are £75m too high across 2014 and 2015, leaving the Treasury needing to put together a package of emergency measures just to keep the Island's current account (known as the consolidated fund) in the black in 2015.
Now, Senator Ozouf's colleagues are demanding to know why they weren't told sooner, and whether the income predictions are also very bad for future years.
Senator Ozouf maintains that the tax forecasts are actually akin to long-range weather forecasts, whose accuracy increases over time, and he did keep other politicians up to date. The Island's tax forecasting is done by a group of very senior civil servants including the States Economic Adviser, the former States Treasurer and the former States Chief Adviser, with the most recent forecasts being done in May this year.
But his department has been heavily criticised in a report produced by the Corporate Services Scrutiny Panel. It includes analysis put together by expert advisers to the Panel, who question why last year's Budget cut taxes, in spite of the much lower income forecasts, with further reductions also initially planned for this year. One of them, Michael Oliver comments:
"This reduction was economically imprudent although remarkably, it seems that a further reduction was planned for inclusion in the 2015 Budget. In the draft briefing on the 2015 Budget prepared for Ministers on 6 June, the intention was to cut the marginal rate of tax by another percentage point. It is difficult to comprehend why the case for further reducing the marginal rate of tax was even considered in the light of the forecasts from the Income Tax Forecast Group which had been produced in May 2014."
Mr Oliver also questions the resignation of the former States Treasurer, Laura Rowley, just four days before the Budget was published, saying it is the first time he has experienced something similar in the developed world. And he has a strong warning about the Island's future income:
"If the outturn for income is as low as the latest forecasts suggest then the 2015 Budget is the calm before the storm. It is a Budget which signals the storms ahead, as can be seen in the emergency remedial measures outlined...these measures do not have any impact on economic growth, but another reading shows how quickly the public finances have deteriorated in Jersey when funds are being raided to balance the books."
Senator Ozouf will contest a vote of no confidence in the States today, brought by his principal political enemy Deputy Geoff Southern. If, as expected, he wins that vote, then later this evening, he has said he will formally put his name forward as a candidate for Senator in the forthcoming elections.
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