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Proposals to change the rules governing States finances are set to be challenged.
A proposal to change Policy and Resources’ (P&R) proposed fiscal policy framework is set to be lodged by deputy Andy Sloan who said he was “concerned” about P&R’s plans.
He said “the public deserved something better” than the rules which were being proposed by P&R.
At a scrutiny hearing on the proposals the P&R vice-president Gavin St Pier defended the committee’s plans and said it would allow for “greater scrutiny” of the island’s finances.
P&R proposed a set of four principles to govern the island’s public finances:
- Balanced income and expenditure
- Sustainable infrastructure investment
- Healthy financial reserves
- Sustainable and well managed debt
Scrutiny Management Committee President Andy Sloan took aim at the proposals and said he was concerned the States was being asked to move from a “rigid rules based framework” to something “more qualitative”.
His colleague on scrutiny Mark Le Page described the proposals as “useless” and warned they risked “becoming wallpaper” if they weren’t improved.
Following the scrutiny hearing looking into the fiscal framework, Sloan warned these new rules could lead to more borrowing of money by the States.
“It’s a licence to borrow more without any real clear predetermined constraints. The idea of fiscal frameworks is that they’re designed to constrain them.
“There’s nothing here that tells me what is affordable, what’s appropriate, what’s sustainable.”
He said after he failed to be convinced by politicians and officials at the scrutiny hearing he had been forced to lay an amendment to the proposed fiscal policy framework.
“I think we’ve got to have a simpler, more easy to understand framework that’s got greater clarity on our fiscal position.
“The idea of permanent balance was that we can’t spend more money than you’ve got coming in.
“That’s still the fundamental imprisonment, so it’s still the fundamental principle that Guernsey needs to adhere to.”