The word “prudence” has haunted many a Treasury Minister. Precise definitions vary, giving different weight to words like “caution” “shrewdness’ and “responsibility”, but then also drawing attention to its roots in the ability to see ahead with wisdom.
But whichever version you prefer, to have a policy described by an independent panel of economic experts as being “not prudent” is hardly positive. Remember the Government’s Fiscal Policy Panel is not known for being extreme in its language, or in any way reactionary in its outlook – for some, one of the delights in their reports is decoding the conservative language, which turns nuance into an art form.
That just makes the strength of their comments about the forthcoming Budget all the more powerful; there is much to digest in their report, and it would be unfairly over-simplified by the summary: “spend less, save more.”
The fact that they specifically call out the most controversial aspects of the budget (the proposal to significantly reduce the Government’s annual Social Security contribution) describing it as “not prudent” at least until they receive another actuarial report, is significant. They are not in the habit of directly criticising a core government policy.
The Treasury Minister has maintained a resolute defence of those policies, pointing out that we are in a position with few easy options: “This Government recognises the difficult trade-offs between delivering essential public services, investing in infrastructure, and rebuilding reserves.” Quite. But deciding on those difficult trade-offs, correctly, is what the government is there to do.
No one disputes the fact that Jersey is facing some tough choices, or seriously believes that the current administration is soley responsible for that. But this is still one of the most critical FPP reports of recent years, commenting negatively on spending, saving and borrowing.
It indicates that pressure will continue to steadily build on the Government in the remaining weeks before the Budget, with further Scrutiny Panel comments, questions and in all likelihood, amendments, to come.
With an election in the offing, the tougher choices over when to spend and when to save are now likely to be made by the next Assembly. But notwithstanding that point, Islanders have a right to expect that the current incumbents clearly nail their colours to the mast, and explain what prudence means to them. The future prosperity of the island really does depend on it.
The forthcoming Budget will give them ample opportunities to do exactly that, and voters should listen very carefully indeed.
