Wednesday, 11 July 2012

Odds and Ends

A Fare Price?

It seems so simple. Under the new bus contract coming into effect in January 2013, the States receive a fixed sum from the bus company, and the bus company's profits are tied into the income they generate. Hence, if you have more passengers, the income will increase. This is seen as at incentive for the bus company to get more people to travel by bus.

But it is not quite as simple as that: the incentive is to increase profits, but what if those profits could be increased - in part at least - in other ways, such as raising bus fares. There is a "captive core" of bus users, commuters who need to get into St Helier every day, and who have no other means of transport. Then there are the casual users, and the visitors. I suspect that the bulk of the income generated comes from the "captive core", and that one alternative way of increasing profits would be to raise the fare, because the captive market will simply have to grit their teeth and bear that burden. I wonder what safeguards there are to limit fare rises?

That's the problem with incentives - they drive people towards targets - in this case increased profits - which need not be directly related to the intention of the person creating the incentive. I wonder what John Seddon - the arch critic of incentives and targets - would have to say about that.

Business Downwards Tendency

The Business Tendency survey, which is just out, shows builders facing problems, and high street retailers seeing falling trade as people cut back on non-essential goods.

Cuts can come it all kinds of ways - a few years back, we decided in our family that while we'd keep birthdays, and give presents to children at Christmas, it was a pointless and costly exercise to give presents to each other, as mostly it was goods we didn't really need. It meant we could reduce the Christmas debt considerably.

Nowadays, often the birthday present wanted is an Amazon gift voucher, allowing the recipient the freedom to choose what they want to spend it on. There's something about a gift voucher that makes it different from simply cash, and perhaps local retailers and traders need to get more in on that act. After all, a gift voucher to be offset against a meal out would be both pleasant and an incentive to eat at that restaurant. Some stores do gift vouchers, but it doesn't, in general, seem as well promoted as it should. It shouldn't be a case of asking "do you supply gift vouchers?" - they should be top of the promotions, highly visible.

David Warr seems to think the States is not doing enough for the High Street, and he wants the GST receipts for the last quarter (January to March) to be released. He believes that raising the goods and services tax (GST) in Jersey from 3% to 5% has caused people to spend less money, Jersey's Chamber of Commerce has said. I'm sure he's right.

There's a core component - heating, water, transport, food - that everyone has to pay, but with anything extra, there is now more of an incentive to mend and make do. With the Island rate set to rise at the cost of living, and electricity prices promised to rise, it seems that less will be spent on goods and services that are not strictly needed. And that means less revenue for the States, and if we are not careful, a GST rate that will spiral upwards to meet falling GST revenue.

Senator Philip Ozouf has an eye on the Business Tendency Survey - here are his Tweets:

"Business Tendency Survey is just out. Shows a continuing picture of economic weakness of last year following the onset of the eurocrisis"

"As explained at last weeks's Chamber lunch we have the capacity to do more. We cannot change the global conditions but can act locally."

"At such a critical time it is vital that the States plays its part in helping new &existing local businesses to weather these global effects"

"Next Friday we will also be announcing the Medium Term Financial Plan which will set out some further fiscal expansion to assist."

It doesn't really say a lot. Let's hope the Medium Term Plan helps. It will be interesting to see exactly how the States decide to "act locally".

Last time, a lot of the fiscal stimulus funding was directed towards building works, but not a lot towards the high street. Perhaps - as lending from banks can be a problem - the States should look into the issue of microloans.

These have been very successful elsewhere in stimulating economies, and they have the advantage that there's a whole apparatus of schemes with procedures and documentation already to hand from other countries. The government of other countries has often been proactive in introducing microfinance, but surprisingly, private schemes have often built on that success and provided extra sources of income.

Deadlines and Slippage

Presented to the States on 5th February 2008, the Draft Discrimination Law still has no date for States debate.

The Energy from Waste Plant is operational, but "It is anticipated the contract will be complete by the end of June 2014"!

Anne Pryke, Minister for Health notes that: "Regarding a new hospital, it has been well recognised that we do need a new hospital and feasibility study has got under way in the last couple of weeks and a report will come out towards the end of August/September time". If it is towards the end of August / September, wouldn't that be - just September? It's curious how deadlines are given to create the appearance of something happening early.

The matter of a redacted copy of Graham Power's submission to the Wiltshire inquiry seems to have been lost. This was a  62,000 word submission to Wiltshire police, putting Mr Power's side of the story. A small part of it has leaked out on blogs. Isn't it about time the whole report was put online, as Senator Le Marquand promised back in 2011? Slippage again.

Senator Philip Ozouf says that it may take up to two years to solve the problem of lost revenue through the zero-ten scheme on trading companies although he does tell Deputy Labey that he can brief him on "what our thinking is" - but the public will have to wait with bated breath:

"I am absolutely content to brief the Deputy in confidence of what our thinking is and will welcome her in the department to brief her confidentially on what our thinking is, and indeed any other Member."

Meanwhile, Senator Gorst has promised to bring something to the States in September 2012 on Vulture Funds. Mark the date.

There are often no deadlines, or very vague deadlines, and a lot of hope and promise, with matters in the States. And outside, in the Town Park, the pavement is still being laid down on the outside road, almost nine months after the official opening!

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