PLANS to reduce the government’s annual grant to the Social Security Fund in order to tackle the Island’s financial deficit have been defended by the Treasury Minister.
Appearing at a Scrutiny hearing about the proposed Budget for the next four years, Deputy Elaine Millar was adamant that cutting the contribution to the fund was the best way of addressing operating deficits estimated to be £50 million per year between 2026 and 2029.
The minister told the Corporate Services Scrutiny Panel that she did not believe Islanders would accept alternative methods of balancing the books.
“If you have a shortfall, the options are to increase tax dramatically, or to cut spending dramatically,” she said.
“If we were to say that we are not going to put more money into health so they had to stop providing services, and we’ll create waiting lists, or we will stop providing school meals, or we will stop providing other services to the public, these things will not be acceptable to public or to politicians.
“Alternatively you could take money out of the Strategic Reserve, which the Fiscal Policy Panel tells us we shouldn’t do, or reduce the States’ grant [to the Social Security Fund] for a temporary period.”
Deputy Millar said the fund was “in very strong health”, containing over £2 billion and shown by actuarial reviews to be sustainable “well into the 2080s”.
The proposed Budget, set to be debated in December, has been criticised by some States Members as a result of the move involving the social security grant.
Deputy Philip Bailhache has declared his intention to bring an amendment to stop what he referred to as “plundering” of the fund by ministers, saying that the government needed to mend its ways.
The veteran backbencher’s comments drew a stinging response on social media from Housing Minister Sam Mézec.
“Over the term of the Budget, the government is putting £184m into the Social Security Fund,” he said. “Philip Bailhache calls this ‘plundering’ – these people are not serious.”
