Saturday, May 2, 2009

An Undesirable Consequence of Zero-Ten

Deputy Geoff Southern has always been willing to stand up for public sector workers, where others see them as scapegoats and soft targets. So, it came as no surprise to me that he was arguing a case against freezing their pay in these troubled times this week.

On the other hand, I do not feel that it was quite as sharp a line of reasoning as I have come to expect from him. Indeed, restricting their spending power does keep that money out of the economy. However, that money has to be withdrawn from the economy by taxation in the first place, to be available to pay salaries with. At least as much, and probably more of the tax will be taken from local taxpayers as will be locally spent by the civil servants who are paid with it.

Before Zero-Ten, of course, we looked to raise as much tax as possible from overseas. In those days, States wages were an effective trickle-down mechanism for bringing that bounty into the local economy. However, the Zero-Ten proposal quite explicitly stated an intention that local residents should become the principal source of tax revenue, and set about slashing the take from those who use Jersey from afar without being genuinely part of our economy and community.

Geoff's ideas could become right again, if we could dismantle Zero-Ten. The catch being now, that it would be difficult to abandon it at this stage, without frightening away more business than we got back into the net. It does need to go in the medium term, but it will have to be whittled away in a subtle series of stealth taxes. Before that, though, we need to find another generation of political leaders as shrewd as those in the 60s, who saw that tax capture would bring us far more prosperity than just skimming what went round inside the island. The present Ministers don't seem to get that they are on an unsound path at present.
Dave Rotherham

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