Falklands : Falklands: PUBLIC MEETING REPORT MONDAY, 23 JULY 2012
Submitted by Falkland Islands News Network (Juanita Brock) 28.07.2012 (Article Archived on 11.08.2012)
A public meeting on the budget took place in the town Hall at 1700hrs on Monday, 23 July 2012. Present were the Hon Dick Salle, MLA (Chairman), the Hon Mr Roger Edwards MLA, the Hon Mrs Sharon Halford MLA, the Hon Mr Ian Hansen MLA, the Hon Mrs Jan Cheek MLA, the Hon Mr Gavin Short MLA and the Hon Dr Barry Elsby.
PUBLIC MEETING REPORT MONDAY, 23 JULY 2012
By J. Brock (FINN)
A public meeting on the budget took place in the town Hall at 1700hrs on Monday, 23 July 2012. Present were the Hon Dick Salle, MLA (Chairman), the Hon Mr Roger Edwards MLA, the Hon Mrs Sharon Halford MLA, the Hon Mr Ian Hansen MLA, the Hon Mrs Jan Cheek MLA, the Hon Mr Gavin Short MLA and the Hon Dr Barry Elsby. Those presenting were Ms Nicola Granger, the acting Financial Secretary and the Hon Mr Keith Padgett, the Chief Executive.
Ms Granger began by explaining the goals of the budget as being a balanced budget and a surplus, economic development, infrastructure improvements, and 2.5% operating budget if there was a financial crisis.
She explained that there would be a £2.6 Million surplus next year and a deficit of £600,000.00 the year after that with a return to black in the year after that. Nothing is included for inflation and/or cost of living awards.
“Daniel” ran through facts and figures of income ranging from fisheries, tourism, income taxes Medical Services Tax and an income from the Quarry.
He went on to say that the planned TV license was discontinued for the time being. Monies would be spent on a Deputy Director of the PWD and a new Veterinary Officer. He went on to explain other income streams like the increase of Government Rents and Vehicle Licenses. He added that £2.9 Million has been spent on oil development.
Ms Granger explained how volatile the Illex fishery is and went on to explain that the investment market was the same. Another factor is the fuel price. She went on to explain that money would be spent on development of a wind farm at MPC as well as Dock Yard Development.
Questions were taken from the floor about the budget. Derek Howatt mentioned the transfer of £3Million to the Pensions – Old Scheme fund to cover the short-fall. He wanted to know what caused the short-fall. Dick Sawle said it was because of the Actuarial Review. Sharon Halford said that that review was very much delayed.
Ms Granger said the review highlighted a deficit of £3.2 Million and that is why the £3Million was transferred to that fund. Derek Howatt suspected the review but he wondered why the £3.2 Million deficit had been caused. He said it would be outlined in the review and he gave an example of the redundancies under the restructure of Government staff. It was costly and was the money needed to prop up the pension funds for the 5 Officers that have been made redundant so far?
He went on to say there was a huge cost associated with that and was it the cause of the short-fall. Dick Sawle said he couldn’t answer the question because MLAs didn’t know the answer. Nicola Granger said the fund was not reviewed prior to the redundancies but it had been reviewed since then. Derek Howatt mentioned that it might be the cause of future short falls.
Councillors kept to the script and answered as seen below. However, they were not answered in the order on the paper.
PUBLIC MEETING QUESTIONS 23 JULY 2012
Questions asked by Derek Howatt
Public finances: balances at 30 June 2012
What was the budget outturn at 30 June 2012 and how does it compare with the approved and revised estimates for 2011/12?
At 30 June 2012 what were the net liquid assets of the Consolidated Fund (2011: £110m)?
At 30 June 2012 what were the total reserves of all funds financed by taxpayer’s equity (2011: £301m)?
Answers cannot be provided for these questions as the close down of the 2011/12 financial year is still underway. As in previous years this information will be provided in the open section of the Standing Finance Committee once available which is anticipated to be September. Since 2004/05 accounts have been prepared under resource accounting which takes about a month longer to prepare than under cash accounting.
Visible and hidden costs and user-pay charges
In an article in Penguin News of 29 June, MLA Mike Summers was reported to have said that while the estimates show house rents making a profit of around £300,000 this did not take into account any overheads of providing the service or any capital charge and if these were factored in the true cost would likely show a deficit.
Does this mean, for example, that the price for electricity, where an approximate break-even position is shown in the estimates, would also show a deficit if overheads and capital charges were taken into account?
Does this also mean that once the price of quarry products are increased to fully recover the visible costs a subsidy representing the hidden costs of overheads and capital charges will continue to be afforded at taxpayer expense?
The recent decision to allocate the direct usage of plant and vehicles to the quarry section enables a better assessment of the true production cost. FIG do not currently have a policy of allocating all overheads to directorates as each service is reviewed separately in order to balance showing the true cost of the service versus the additional bureaucracy and paper work that would arise from all central overheads being recharged.
Keith Padgett gave a presentation on the Referendum due to be held next year. He told those attending that at this stage his was a presentation to let people know what the thinking was rather than specific items. There are more questions around about what was going to be done about the referendum than there were answers at this point in time.
He went on to say that there was an internal working group that discussed several key areas of interest, the first issue being when the referendum was going to be held. “It could be anytime between now and the end of next year,” he added.
“Ideally we would like it soon and to coincide with some big international event,” he said but in practice, he continued, the job needed to be done properly. He said there were a number of things that needed to be in place before we could actually bring the referendum to the people.
It was much less complicated to do the referendum on the single decision because it was an internal decision but this one has international and timing implications.
A paper on the referendum will go to Executive Council probably in August and it looks as if the referendum would be held in March 2013.
“The only other fundamental aspect of this referendum is what the question(s) will be,” he said. He went on to explain that one question could be whether or not we wished to remain British as that was a straight forward question.
“We’ve got to think about why we are having this referendum,” he added. It is not for ourselves in the Islands as we all know what we think the answer to that question will be. However, the purpose of the referendum is to give a message to everyone out there – people who don’t even know where the Falklands are. Outsiders would not want to see a question as black and white – as biased as that but a more objective question.
For this, international experts will come to the Falklands to help frame the question in that the Islanders want a reasonable question to be asked in the eyes of the international committee.
Mr Padgett said the question needed to be clear yet ambiguous and something that everybody could understand. A complex nest of questions were not wanted as they would only confuse people.
“Ideally we want a question that people will say “yes” or “no” to – and preferably a question that people will say “yes” to,” he told the audience. The reasoning was that Islanders didn’t really want to be voting against something. For that reason, the question needs a lot of work before it is finalised. Official information then needs to be put together as well as campaigning to take part on both sides of the issue to make the process as transparent as possible for the international audience.
Mr Padgett was firm that he didn’t want people to think the referendum was done wrongly or unfairly, even though we know what the likely outcome would be. “That will not gain us anything,” he said. “We need to be persuading other people who don’t understand what our arguments are.”
Eligibility to vote is another area with issues. Obviously people who are on the electoral roll would be eligible but there could be more people participating in this one-off referendum. This needs to be considered as well as complications of why we need eligibility for the vote – people under 18, Falkland Islanders living abroad, residents at MPA could be considered but consequences in pulling all together in this way need to be looked at.
Mr Padgett mentioned International Observers but he did not think massive numbers from the United Nations would be helpful. We want to have something recognised as a reasonable referendum we need a specialist in doing these kinds of things to advise us and to reassure the international community that what we have done is reasonable.
Legal and practical issues also needed to be dealt with but before we did anything it must be enshrined in our legislation what the question is, all the documentation and all the forms.
There are areas where we know our legislation has to be made current and relevant.
He concluded that the referendum was not going to be done on the cheap as in the eyes of the world it must be seen to be done fairly and in a reasonable and logical way. Money would be needed not only locally but in terms of bringing people down here. They would need flights, accommodation, transport and maybe wages. As yet this is an unknown to us.
Mr Padgett said an individual would be approached to see if he would be willing to do it on our behalf. How we go about it depends on the guidance we receive.
In conclusion Mr Padgett stressed that the referendum’s results were a message that would be given to the international community. A communications strategy needed to be put together for our own information but what we tell the international media what is going on and why we are doing this.
“A word of caution,” said Mr Padgett, “We need to do it right.”