WHILE Members of Legislative Assembly might find it hard to believe the staff at Penguin News are a warm and empathetic lot and we do understand that the Falkland Islands Government faces genuine challenges.
Struggle as I do with financial terms, I always think smooth talking Financial Secretary Pat Clunie does a grand job delivering fairly jargon-free presentations to us dum dums. Certainly enough so that I could work out great big infrastructure projects are underway, corporation tax revenues have fallen from recent highs, borrowing costs are now a permanent feature of the financial landscape and the wider global economy feels less predictable than it has for many years. (I hope you’re impressed).
So yes, even this wooden head knows prudence isn’t just a Beatles’ song.
But when I was sitting there on Monday I couldn’t help noticing how often the discussion returned to scary words like risk, uncertainty, contingency and resilience. (I actually wrote resilience down five times but he may have said it more). Every possible downside appears to have been carefully considered, each threat acknowledged and absolutely every financial forecast tiptoed towards.
That’s understandable of course – what is less clear is whether the same attention is given to the possibility that things may turn out better than expected or even just ya know – OK.
Member of the public and former MLA Michael Poole (see page 5) raised an interesting point when he questioned whether the Treasury tends to underestimate future revenues. Whether you agree with his figures or not, he was asking if forecasts consistently err on the side of caution, what effect does that have on the decisions that follow?
Of course government budgeting should never be based on wishful thinking, such as oil revenues that have yet to materialise, nor assume that every economic opportunity will come good.
At the same time neither should it be driven entirely by the most cautious interpretation of the future.
The thing is the Falklands may be a relatively prosperous country, but wealth isn’t always experienced equally. High rent costs and the general cost of living leave many people with little room to manoeuvre. Decisions that appear small in Government finances can feel very much larger in the household purse. It’s all very well to say support schemes can be activated if inflation rises further, but by then some of the pressure has already been absorbed by households.
Not everyone seeks assistance when times become difficult. Some are too proud, some are reluctant and some simply carry on until there is little left to cut.
The Falklands remains a prosperous country with considerable strengths. Significant reserves remain in place. A once-in-a-generation programme of investment is transforming national infrastructure. New opportunities continue to emerge in fisheries, tourism and potentially other sectors besides.
Prudence is a virtue, for sure, but so is confidence.
