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Revealed: cuts, stealth-taxes and redundancies as States face £135 million deficit

Revealed: cuts, stealth-taxes and redundancies as States face £135 million deficit

Tuesday 21 April 2015

Revealed: cuts, stealth-taxes and redundancies as States face £135 million deficit

Tuesday 21 April 2015

Plans for £60 million worth of staff savings and job cuts, along with £35 million worth of benefit cuts and user-pays 'stealth taxes', have been revealed this morning as ministers work to plug a £135 million black hole in States finances.

States Members and staff were briefed on the changes this morning, ahead of a briefing to the media planned for later today.

But a document seen by Bailiwick Express ahead of the media briefing sets out how ministers plan to tackle the deficit, which appears to have grown significantly since the election last year.

The report shows that last year’s tax income was below forecast, and that economists now think that finance sector profits, public earnings and job creation will all now be lower than was being predicted last July.

And it says that for the first time in years, the government might start laying people off. A voluntary redundancy scheme is set to start to reduce the public sector pay bill – currently running at £1 million per day – and ministers say that it will be used “to minimise the number of compulsory redundancies."

The problem for the States is compounded by the fact that ministers have to find another £50 million for the Health department and another £9 million for the Education department every year, just to cover much-needed investment in looking after the growing elderly population, raising pay for nurses and improving standards in schools.

Ministers’ plans also include what they call “a small number of fees and charges” – on top of ongoing plans for charges for liquid waste (ie. a sewage tax) and solid waste disposal.

The report says: “Proposals are also being considered in relation to a small number of fees and charges for certain services where the current recovery could appropriately be increased. Separately, measures are also being developed to establish an appropriate source of funding for liquid and solid waste disposal.”

But they make clear in the document that major tax changes or changes to the contribution system that funds Social Security and the Health Insurance Fund which covers some GP costs and prescriptions, remains a final option which they are holding in reserve.

The plans for benefit cuts include targeting money only at those who really need it, setting out incentives for people to get back into work and spreading the impact of the cuts across wide groups of claimants, not just on small groups.

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Posted by June OKeeffe on
This is a disgrace that Jersey has come to this. Why cant the government stop spending in the wrong places, stop take take take from the people who work hard and pay all these taxes and costs and yet they still cant get it right.
Posted by Havelock Jones on
I would imagine this all goes back to the introduction of income support. I expect this was the usual States' hysteria, we must do something. A few years down the line we cannot afford this, especially as it is paid to people who work in low paid employment for 5 years, pay next to no tax, have several children and cost tax payers a fortune to support. How long before GST is 20%, top rate of income tax 40% and capital gains tax, etc - just like the UK?
Posted by Sarah Ferguson on
Which takes us back to revising the taxation system to make it simple, straightforward and kills off zero 10.
Posted by nigel pearce on
I hope that Sarah Ferguson stands for election next time. She had more idea than the present incumbents.
I think a start could be made by doing away with wasteful vanity projects such as the idiocy that has taken place in St. Mary and St. Au in which cost fortunes to achieve nothing of consequence.
I also wonder how much more efficient the hospital wards would be if Matrons were introduced to replace so-called managers. ( I would like to say that the A.& E dept. is beyond critisism, attention received here is always exemplary).
I agree that zero-ten should be abolished in the name of fairness. We should look at the ridiculously high exemption for imported goods.
Posted by Tim South on
This is appaling but sadly expected the way the States spend money. Havelock jones is only partly correct. How can a £360,000,000 public sector wage bill, yes £360 million, which increases year on year, on a rock of forty five square miles ever be sustainable ?
Posted by BrianPoole74 on
Start by reversing zero 10
Charge 30% schedule A property tax - taxpayers are subsidising high rental income.
Stop paying massive sums to consultants to make poor decisions for Jersey
and most importantly stop copying what the UK do as they are in a mess themselves.
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