Er, can we have 250 million quid, please?

[GD4XXX]

So the government wants to borrow 250 million pounds, adding almost £3,000 onto the national debt for every man woman and child on the island. Might seem tempting to borrow so much money to soften the blow of the upcoming economic slump, but aren't they concerned that rates bills and other forms of taxation here are already at eye-watering levels compared to a couple of decades ago??

[Grayson]

11 minutes ago, GD4XXX said:

So the government wants to borrow 250 million pounds, adding almost £3,000 onto the national debt for every man woman and child on the island. Might seem tempting to borrow so much money to soften the blow of the upcoming economic slump, but aren't they concerned that rates bills and other forms of taxation here are already at eye-watering levels compared to a couple of decades ago??

I don’t get your point. But then again I haven’t got any of the senseless hysterical government bashing that seems to go on here everyday. We need this money. They need to have he ability to deploy more capital into the private sector if we have other spikes of this and people can’t work and they also need to cushion the economy as tax revenues and VAT are going to take a massive dive for at least one and possibly two quarters and they already can’t balance their budgets. The only issue I have with it is why are we borrowing money when a 20% slice off the salaries of all MHK, execs, and non essential management could save tens of millions a year, and cutting our ridiculous capital projects budgets could save the same. But we do need to be able to have access to this cash. Guernsey is going for £500m I believe for the exact same reasons. 

[Non-Believer]

18 minutes ago, Grayson said:

I don’t get your point. But then again I haven’t got any of the senseless hysterical government bashing that seems to go on here everyday. We need this money. They need to have he ability to deploy more capital into the private sector if we have other spikes of this and people can’t work and they also need to cushion the economy as tax revenues and VAT are going to take a massive dive for at least one and possibly two quarters and they already can’t balance their budgets. The only issue I have with it is why are we borrowing money when a 20% slice off the salaries of all MHK, execs, and non essential management could save tens of millions a year, and cutting our ridiculous capital projects budgets could save the same. But we do need to be able to have access to this cash. Guernsey is going for £500m I believe for the exact same reasons. 

As long as the intention is indeed to deploy it into the private sector of course.

As posted previously, £250M equates to @ 6 months of PS pay on current commitments with no signs of any intention or ability to slim that down as yet. The public, particularly private sector pay enough in direct and indirect taxation already in the name of sustaining that lot.

[Grayson]

2 minutes ago, Non-Believer said:

As long as the intention is indeed to deploy it into the private sector of course.

As posted previously, £250M equates to @ 6 months of PS pay on current commitments with no signs of any intention or ability to slim that down as yet. The public, particularly private sector pay enough in direct and indirect taxation already in the name of sustaining that lot.

100% agree. 

[NoTail]

I think you are being optimistic thinking the problem is for one or two quarters. 

[GD4XXX]

1 hour ago, Grayson said:

..... they also need to cushion the economy as tax revenues and VAT are going to take a massive dive for at least one and possibly two quarters and they already can’t balance their budgets.

So you're happy for them to borrow a quarter of a billion even though "they already can't balance their budgets." Curious...

[Grayson]

2 minutes ago, GD4XXX said:

So you're happy for them to borrow a quarter of a billion even though "they already can't balance their budgets." Curious...

Yes because firstly they have no other option, and secondly because other places seem to be lining up to lend even more because they know they have to.  

[asitis]

If we are to borrow eye watering sums of money then Government must for goodness sake get a grip of its capital expenditure. Lots of people on here have been banging on for years about the profligacy and fiscal irresponsibility of Government. It was clear times were not as they used to be when cash was swilling around, but that didn't stop the planning and implementation of ridiculous capital projects which placed further strain on the precarious balancing act Government would have us believe is fiscal responsibility !

If ever there was a time to start swallowing a bit of pride and cancelling stuff and thinning down it's now, it should have been twenty years ago, but all were afraid of doing anything to affect their chances of rejoining the gravy train. What I believe will make people electable in the future, would be an acceptance of changed times and a proposal to do something about the situation, not rocking the boat is no longer an option !

 

[PaulJ]

Anyone paid by government either directly or indirectly earning more than 15K p.a to take a 30% drop in wages with immediate effect would help

[Golfer]

Not much chance of that , they've just got another 2.75% pay rise , not sure how much that adds onto annual wage bill 

[Non-Believer]

44 minutes ago, Golfer said:

Not much chance of that , they've just got another 2.75% pay rise , not sure how much that adds onto annual wage bill 

The bill was £320M pa some 6 years ago. Since then there have been regular rises and increments, some considerable. It can't be far off £500M pa now.

Can anybody reference the Pink Book from the last Budget to confirm?

[nelwd]

4 hours ago, PaulJ said:

Anyone paid by government either directly or indirectly earning more than 15K p.a to take a 30% drop in wages with immediate effect would help

So you suggest that all Dr's, Nurses, Police Officers, Firemen, Ambulance staff, teachers, should be given a 30% pay cut. I think the reaction will be that 90%+ of them will simply leave the IOM. All of these sectors are in demand in the UK and other places.

[Derek Flint]

12 hours ago, Grayson said:

Yes because firstly they have no other option, and secondly because other places seem to be lining up to lend even more because they know they have to.  

There is another option.  It first, the question must be asked; is the Isle of Man, as a micro nation, any longer sustainable? We are seeing major companies such as BA, shedding 25% of its workforce, preparing for a very different world. The time is upon us to assess whether there is any point in continuing with independence?

if all we are doing is playing at nations, then we really do need to square up to this. It doesn’t stop ‘Manx’, it just means we become part of a much bigger unit. A tough debate but it needs to be had.

2 minutes ago, nelwd said:

So you suggest that all Dr's, Nurses, Police Officers, Firemen, Ambulance staff, teachers, should be given a 30% pay cut. I think the reaction will be that 90%+ of them will simply leave the IOM. All of these sectors are in demand in the UK and other places.

Many police couldn’t now transfer as the training system here is becoming very different from the UK. transferees could go back though. 

I think in terms of slicing we need to look at what is important. If it is not a need to have, why is it being done?

[Golfer]

I don't think anyone is suggesting medical staff, emergency services etc should have a pay cut. Not sure about teachers but certainly anyone earning over say £60k which is over double average wage should have a reduction or at least no pay rises.

[Phillip Dearden]

14 hours ago, Grayson said:

I don’t get your point. But then again I haven’t got any of the senseless hysterical government bashing that seems to go on here everyday. We need this money. They need to have he ability to deploy more capital into the private sector if we have other spikes of this and people can’t work and they also need to cushion the economy as tax revenues and VAT are going to take a massive dive for at least one and possibly two quarters and they already can’t balance their budgets. The only issue I have with it is why are we borrowing money when a 20% slice off the salaries of all MHK, execs, and non essential management could save tens of millions a year, and cutting our ridiculous capital projects budgets could save the same. But we do need to be able to have access to this cash. Guernsey is going for £500m I believe for the exact same reasons. 

If the Government's main financial problem is cashflow going forwards, how does borrowing fix this?

Before Covid-19 I did not see any evidence that the Private Sector was being held back by lack of funds to invest in viable projects. On the contrary, the world seems flush with cash and if you have a good investment someone will fund it.

I suspect the loan is to fund short-term liquidity given the recent reduced inflows and expanded outflows. Whilst this may be necessary, it will mean some belt-tightening in the future.