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Thursday, 10 November 2011

Review of the 2011 Jersey budget

We were told Jersey would be saved from economic catastrophe if the government straightened the Avenue. The first stimulus worked, apparently, and all we need to bring back prosperity, is more government stimulus.

Stimulus might appear to work for some people for a short time.  For a time, they could pretend to be engaging in productive activities that would help the economy. For a time, employment was higher, but these were not long term jobs, the capital spent did not remain in Jersey, nor the wages of those employed.

The government is a terrible venture capitalist.

"Biggest targeted improvement in taxation for families 
with young children the island has ever had." Philip Ozouf

What were FREE States Nursery Places are now charged for 
so that's a tax rise by stealth, no?
The charade cost the Jersey people millions of pounds they could not afford, yet there is no mea culpa. No one is questioning the calculations, or how they could have been so wrong, in the wake of the last stimulus.

Instead, they want more money. Once again we are hearing the cry that if we care about our island, we will support more spending and more taxes and that will create more jobs. They promise.

Yes, you could have gone to the Avenue and you would have seen jobs. What you could not have seen were long term productive jobs, because they were never created. Real venture capitalists make decisions based not on politics and photo opportunities, but on complex economic estimations of risk and reward. 

They don't simply throw piles of other people's money around expect magic to happen. 

We have lower government reserves which has lead to higher taxes. These, in addition to an already hostile regulatory environment, only add to the burden and risk of job creation in the private economy.

It has been said that when all you have is a hammer, everything is a nail. Our government is full of people who sincerely believe big government and more spending is the answer to every problem. They automatically look to government for every solution. Government is their hammer, and all they know to do is to keep hammering. When government "solutions" still don't solve the problems, they are unfazed. They keep calling for more government, more laws, and more programs. But the people are tired of being treated like nails.

This government-centric mindset is the root of the problem. People who think this way are naturally drawn to politics and government. To them, the electors are an annoying road block, something to get around, or ignore.

We must become interested in real, lasting, productive jobs - careers that allow families to build up a solid foundation of prosperity and economic security - not pretend make-work government jobs that waste resources and vanish overnight. We have to choose one or the other.