Unintended consequences hit every part of our lives. A business-like social rental approach will push up the taxpayer burden through income support. At the same time the Government’s decision to be a property developer for local and overseas investors shall create rent inflation as immigration policies will be geared to attract demand. My argument was that if they don’t change the social housing policy in accordance with economic and social conditions then rent caps for all landlords becomes more likely.
Similarly, the possible longer-term unintended consequence of the States becoming property developer through the States of Jersey Development Company, may be higher stamp duty on all buy-to-let properties, restrictions on overseas buyers, and the eventual winding-up of the States Development Company. This is because the problems this policy causes, and the possible future need to shut the stable door well after the horse has bolted, may force the adoption of policies that are neither popular nor necessarily in the best long-term interests of the Island.
As Paul Krugman (Nobel Economist) succinctly argued in his paper “A Country is not a Company”, the body of knowledge required to successfully run an Island far outweighs that required to run a business, where the consequences of actions, and aims of the business, are actually quite narrow. I worry that those business people offering policy advice do not have the necessary intelligence to understand the basic needs of islanders, and the longer-term implications of short-sighted business driven policies. My Jersey is not a business.
Written by Ben Shenton