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Island Teeters On The Verge Of Bankruptcy


pongo

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Bloated civil service threatens to turn island into the new Greece - The Guardian

 

it-sicv2.gif

 

Okay - I admit that this is a lame post. The only thing we have in common with Sicily is a similar flag.

 

I dont know, this sounds familiar.

 

"The problem is called clientelismohanding out jobs in return for votes, a practice that has proliferated since Sicily was granted autonomous status in 1946. "The habit of hiring scores of temporary staff, who will then vote for you in the hope of winning a permanent post, is shameful," said Vecchio. The current governor, Raffaele Lombardo, has promised to end the practice and has hired reformers such as Vecchio to flush out loafers, but the jury is still out on his efforts. "Lombardo sees the times are changing, but has the same Christian Democrat background as his predecessors and has quietly been busy hiring dozens of consultants," said Enrico Del Mercato, co-author of La Zavorra, which lifted the lid on Sicily's civil service."

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  • 4 weeks later...

Draw a very simple graph with two lines on it showing Income and Expenditure over the past 20 years and continue a projection for the next 5. OK, tweak the expenditure a bit for the projection if you want (we have some control of that surely).

 

Bump this thread when the lines cross.

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Draw a very simple graph with two lines on it showing Income and Expenditure over the past 20 years and continue a projection for the next 5. OK, tweak the expenditure a bit for the projection if you want (we have some control of that surely).

 

Bump this thread when the lines cross.

RonnieD - the problem with doing that is that the revenue line has to take account of the big hit with the adjustment of VAT income.

 

If the numbers mentioned by politicians in the past are the real ones it means that the 'straight' line takes a £180-200 million p.a. drop - which is not a straight line projection!!!

 

Despite all his past (meaningless as it turns out) statements, Bell has sanctioned dipping into the Reserves to pay for government expenses being higher than government revenue - so the line has already been crossed.

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The problem with the £180-200 million figure is that it is a moving target. That was the worst case scenario, but increases in the rate of VAT, various duties, inflation and other tax increases on the Island has brought it down significantly. Add to that the cut backs in government spending and the shortfall is £50M this year - the worst year. If the government plays it's cards right things will improve. Unfortunately, that is the problem.

 

If you want a say in the way it is going to work, I suggest you fill in the taxation strategy consultation on the IOMG website. I know I will be.

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The problem with the £180-200 million figure is that it is a moving target. That was the worst case scenario, but increases in the rate of VAT, various duties, inflation and other tax increases on the Island has brought it down significantly.

Cambon, isn't the reality that VAT has only increased by 2.5% but, at the same time, if one is to believe what one reads on this website and elsewhere, public spending as gone down as wages have been held at zero increase outside the PS, and government figures indicate that finance sector activity which seems to be about the only source of economic activity taxed on profit has also been in decline - additionally DIY Eddie was bemoaning the fact that people were buying less fuel and excise duty had fallen from that source too.

 

So I am not 100% convinced that £50 million is the maximum loss of revenue or that the item you have raised have amounted to reductions in spending and additions in revenue of £130-£150 million.

 

Quite possibly one of the problems is that the IOMG has not actually defined how much revenue they were going to lose - the £180-200 million figure that has been floating around may be wrong.

 

I agree with your final comments and have done so via letter rather than via the 'consultation' pro-forma with copy to Eddie.

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Mansh - Most figures in the pink book have stayed fairly static. The things that have changed are resident income tax and vat. The figures go like this. These are the "probable" figures rather than the "budget" figures as the "probable" is more accurate.

 

year vat Income tax total

05-06 £315m £101m £416m

06-07 £376m £115m £491m

07-08 £339m £122m £461m

08-09 £313m £137m £448m

09-10 £264m £135m £399m

10-11 £254m £147m £401m

11-12 £287m £149m £436m

 

You can clearly see when the VAT cuts were, and the 2.5% increase in 2010. So the VAT cuts mean that in 11-12 we were £89m short of the highest vat we ever had, but local income tax receipts were up £48m, a difference of £55m from best ever to now.

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