Minister of Treasury - Dr Spend - waffle, spin, deflect

[code99]

29 minutes ago, Banker said:

No government can just change laws on pension etc without massive consequences unless you’re a dictatorship like China 

Republic of Ireland?

Financial Emergency Measures in the Public Interest Act 2010:

https://www.irishstatutebook.ie/eli/2010/act/38/enacted/en/html

2.— (1) With effect on and from 1 January 2011, the annualised amount of a public service pension payable in accordance with his or her entitlement to a person who—

(a) is a pensioner, or

(b) becomes a pensioner on or at any time before the relevant date or, in the case of a pensioner falling under paragraph (c) of the definition of “pensioner” in section 1 , at any time after that date,

shall be reduced in accordance with the Table in this subsection.

TABLE

Annualised amount of public service pension	Reduction
Up to €12,000	Exempt
Any amount over €12,000 but not over €24,000	6 per cent
Any amount over €24,000 but not over €60,000	9 per cent
Any amount over €60,000	12 per cent

 

 

[Non-Believer]

24 minutes ago, Banker said:

Doubt it would add up to £100m pa but you still don’t say which civil servants you would sack? You can’t just sack someone for no reason without paying redundancy and you can’t stop pension rights accrued over many years unless serious fraud can be proven. No government can just change laws on pension etc without massive consequences unless you’re a dictatorship like China 

Ireland and one or two others were obliged to find ways of reducing their pension liabilities as part of the EU bailouts of a couple of years back. They managed to find the will to do it and that is what is missing here because of the unpopularity it would generate.

As an ex- PS sector, I reckon that if you let a professional right-sizing outfit loose on IoMG/PS with a free hand, they would empty <20% straight away, including lots from middle and top. However, there would then be a huge knock-on to the economy and quite possibly an exodus too.

So it's a rock and a hard place. Bankrupt the place by trying to keep the illusion going (the current approach) or accept that natural economic gravity will make the Island's population and economy far smaller - which is unacceptable for those who do very well out of the current position, to include politicos and reams of PS employees.

So we will continue the slide unless 500,000 visitors or a gas-field appears and fills the coffers.

[Dirty Buggane]

19 minutes ago, code99 said:

Republic of Ireland?

Financial Emergency Measures in the Public Interest Act 2010:

https://www.irishstatutebook.ie/eli/2010/act/38/enacted/en/html

2.— (1) With effect on and from 1 January 2011, the annualised amount of a public service pension payable in accordance with his or her entitlement to a person who—

(a) is a pensioner, or

(b) becomes a pensioner on or at any time before the relevant date or, in the case of a pensioner falling under paragraph (c) of the definition of “pensioner” in section 1 , at any time after that date,

shall be reduced in accordance with the Table in this subsection.

TABLE

Annualised amount of public service pension	Reduction
Up to €12,000	Exempt
Any amount over €12,000 but not over €24,000	6 per cent
Any amount over €24,000 but not over €60,000	9 per cent
Any amount over €60,000	12 per cent

 

 

You were saying Banker

[Banker]

46 minutes ago, Dirty Buggane said:

You were saying Banker

Were any employees sacked for no reason without redundancy? The vast amount of IOMG pensions paid are under the amount Ireland exempted from reducing, you were saying buggane?

[Dirty Buggane]

You are stating that the vast majority of cs pensions are under £11,000

Edited November 28, 2023 by Dirty Buggane

[woolley]

15 minutes ago, Dirty Buggane said:

You are stating that the vast majority of cs pensions are under £11,000

Probably not, but I think more than you would imagine where people have short service. Obviously not lifers. No issue with lower pensions. It's the ones over £30k they should be haircutting progressively the higher they go. In addition to state pension it's largesse on the taxpayer. It won't go near solving our financial problems, but it should be about justice being seen to be done rather than flouted.

They were happy enough to cut state pension by 100% for women between 60 and 66 and men between 65 and 66 with more pain to come. Hard times.

[Banker]

21 minutes ago, Dirty Buggane said:

You are stating that the vast majority of cs pensions are under £11,000

Correct they are, also Irish pay & pensions reduced during crisis were mainly restored during later years .

[GreyWolf]

One for Roger maybe, if (when) our government does run out of money and they have built up debts we can’t make, would one of the nightmare possibilities be a Cyprus haircut on all our money.

[code99]

After the VAT agreement with the UK was amended the IOMG should have done things differently i.e., more effectively, efficiently and productively… should have reduced its spending to fit inside the ‘new purse’ and to modernise the CS/PS and its culture. Unfortunately, making the necessary changes would have required different leadership skills that most IOM politicians seem to lack.

These past failures have left the IOMG with some difficult choices, such as:

• Increasing the population can only work as a source of additional Government income if the new residents pay more tax than the corollary costs/ demands they place on public services;
• Increasing tax rates or introducing new taxes could make the Island less attractive as a place to do business, and also chase some talent away.

I still hope that changes to International Taxation rules that govern the taxation of large companies will result in some companies paying significantly more taxes here. But even if this provides a sizeable windfall, we will need politicians who are “as cunning as a fox who's just been appointed Professor of Cunning at Oxford University College of the Isle of Man” - who can walk the walk, not just talk a good talk.

If the IOMG goes bust then the UK Govt will have to step in. IMHO, any bailout they provide will come with many unpalatable strings, e.g., there could be cuts to public sector pensions. In practical terms, I envisage that pensions of low-income pensioners and those from frontline services including health and education will be protected. Depending on the UK Govt political attitude to the Island at that time, pensions of former IOM politicians and senior CS/PS staff could be severely cut. I am not sure that many residents either understand or want to understand the scenario ‘if/ when the Government’s money runs out’…

The IOM’s (paper thin) independence from the UK has existed for centuries and losing this would be a monumental blow to the whole of Island’s population. The emotional grief which will inevitably follow such an historical event would grip the Island for years. Our politicians must be focussed on doing what is best for the Island, and not be ‘in power’ to enhance their own interests.

[Banker]

1 hour ago, code99 said:

After the VAT agreement with the UK was amended the IOMG should have done things differently i.e., more effectively, efficiently and productively… should have reduced its spending to fit inside the ‘new purse’ and to modernise the CS/PS and its culture. Unfortunately, making the necessary changes would have required different leadership skills that most IOM politicians seem to lack.

These past failures have left the IOMG with some difficult choices, such as:

• Increasing the population can only work as a source of additional Government income if the new residents pay more tax than the corollary costs/ demands they place on public services;
• Increasing tax rates or introducing new taxes could make the Island less attractive as a place to do business, and also chase some talent away.

I still hope that changes to International Taxation rules that govern the taxation of large companies will result in some companies paying significantly more taxes here. But even if this provides a sizeable windfall, we will need politicians who are “as cunning as a fox who's just been appointed Professor of Cunning at Oxford University College of the Isle of Man” - who can walk the walk, not just talk a good talk.

If the IOMG goes bust then the UK Govt will have to step in. IMHO, any bailout they provide will come with many unpalatable strings, e.g., there could be cuts to public sector pensions. In practical terms, I envisage that pensions of low-income pensioners and those from frontline services including health and education will be protected. Depending on the UK Govt political attitude to the Island at that time, pensions of former IOM politicians and senior CS/PS staff could be severely cut. I am not sure that many residents either understand or want to understand the scenario ‘if/ when the Government’s money runs out’…

The IOM’s (paper thin) independence from the UK has existed for centuries and losing this would be a monumental blow to the whole of Island’s population. The emotional grief which will inevitably follow such an historical event would grip the Island for years. Our politicians must be focussed on doing what is best for the Island, and not be ‘in power’ to enhance their own interests.

You’re definitely correct in that action should have been taken sooner and we’re now in a difficult position of either cutting services, raising taxes, spending reserves, borrowing moreor combination .

There’s no windfall from the new international tax although I think £4/5m extra mentioned.

We still have substantial reserves c£1.5bn in liquid assets so I don’t foresee any bankruptcy scenario with reliance on reserves forecast to fall although some austerity maybe required. The public sector pension liability is only an actuarial estimate if every £ accrued/forecast had to be paid out in one amount today.

[code99]

13 minutes ago, Banker said:

We still have substantial reserves c£1.5bn in liquid assets so I don’t foresee any bankruptcy scenario with reliance on reserves forecast to fall although some austerity maybe required.

Dr Allinson: "With £1.7 billion currently left in reserves - £900 million of which in the National Insurance fund – the available money that government has to spend is sitting at around £600 million". 

https://www.manxradio.com/news/isle-of-man-news/treasury-next-budget-needs-to-provide-long-term-stability/

https://www.manxradio.com/news/isle-of-man-news/budget-2023-what-do-you-need-to-know/

[Non-Believer]

Skelly claimed a couple of years ago that we had billions in reserves.

That's a sure sign that we haven't.

[Banker]

1 hour ago, code99 said:

Dr Allinson: "With £1.7 billion currently left in reserves - £900 million of which in the National Insurance fund – the available money that government has to spend is sitting at around £600 million". 

https://www.manxradio.com/news/isle-of-man-news/treasury-next-budget-needs-to-provide-long-term-stability/

https://www.manxradio.com/news/isle-of-man-news/budget-2023-what-do-you-need-to-know/

So even more in reserves than I thought so no chance of going bust in foreseeable future, other crown dependencies would welcome our level of reserves to help them 

[forestboy]

11 minutes ago, Banker said:

So even more in reserves than I thought so no chance of going bust in foreseeable future, other crown dependencies would welcome our level of reserves to help them 

Our lot will soon squander it on unnecessary grandiose schemes. 

[code99]

7 minutes ago, Banker said:

So even more in reserves than I thought so no chance of going bust in foreseeable future, other crown dependencies would welcome our level of reserves to help them 

But only if the IOMG changes its current official policy and allows itself to spend some of the £900m in the NI Fund to pay for Government's day-to-day or capital project spending. Recently, Dr Allinson re-stated that the IOMG/ Treasury will not do this. That means that the Government does not have "c£1.5b in liquid assets", just £600m.

Personally, I do not care at all what financial predicaments Jersey and Guernsey are in - these are their problems that they will need to take up with the UK Govt when the time comes.