There were testy exchanges between the Scrutiny Committee and Policy & Resources over the latter’s proposed fiscal policy, with some Scrutiny members labelling some of the changes “meaningless” and “pointless”.

The States’ Chief Resources Officer Bethan Haines and P&R Vice-President Deputy Gavin St Pier represented the senior committee in a public hearing with Scrutiny yesterday.

Scrutiny President Deputy Andy Sloan said the panel had concerns that the new fiscal rules, soon to be debated by the States, had been watered down suggesting that the rules are supposed to constrain governments but felt this was being removed “with the objective of more borrowing in mind”. 

Former Chief Minister Advocate Peter Harwood added there had been a “fundamental change” of terminology by moving the core objective from long-term balance to long-term stability. 

Mrs Haines said the changes were due to revisions in how economic growth is calculated and the governments’ move to internationally recognised accounting standards, and insisted the wording meant the same thing.

This garnered ill-tempered reactions from Deputy Sloan who repeatedly questioned the pair on the definitions in the document from “sustainable and well managed debt” to pressing them on what economic theory was being applied. 

You can watch the full hearing here:

Deputy St Pier said the fiscal policy was “always intended to be” a principles based framework which guided the production of budgets and funding and investment plans rather than “tight rules”. 

But Advocate Harwood said there was a lack of timelines and vague concepts like “economic cycles” in the policy which rendered it “pointless” and meaningless”. 

Deputy St Pier hit back saying “long-term” in previous versions of the policy were “equally unclear”, and while the public may have drawn comfort from the setting out of timescales he argued they were never followed by previous governments.

Scrutiny also derided P&R for using assessments from consultants that were 24 months out of date that suggested the States had significant headroom for additional borrowing.

Advocate Harwood labelled this “strange” and suggested that the States’ reserves have shrunk in the intervening time.

“Detailed assessments are not really the thing for this framework,” Deputy Sloan said. 

Another Scrutiny member, Deputy Haley Camp who was not on the panel but watched on from the audience, posted on social media after the hearing that “At first glance, the Fiscal Policy Framework is an exercise in PR for an upcoming cycle of taxation (GST+) and borrowing.

“The Public Accounts sub-committee have helped to solidify that view.”