Whatever the official outcome of the UK general election today, the new British Government faces a huge challenge with their economy.

Events of the week in Greece show us the other side of an EU spending spree that ends but where an economy has not adjusted to the times.

 

Spain still faces a very serious challenge and the signs we have seen there so far - unemployment, over-priced property and inflation for a start - have yet to mix into an unpleasant cocktail.

Gibraltar, luckily, has had quite a bit of fat to cut and overall has fared the global economic crisis well so far.

Yes, there have been some jolts and there are some sectors feeling the pinch considerably more than others.

The Chamber of Commerce has sung the same songs for so long that they only hit the deaf ears of politicians. Whoever is in Government, the one thing public sector streamlining does not help growth in is votes.

We can moan about infrastructure costs - roads or the air terminal - but in the medium to long-term these invariably prove to be major catalysts for new growth.

But, if not for long-term economic prudence, simply for fairness, our political class must finally address the public sector. Summer hours, sick leave abuse and retirement at 55 on final salary schemes, are issues which our government needs to move on. Pay may well freeze this year - if parity is really parity - but it is in the area of pensions that the challenge is greatest.

Whilst there has been a gradual attempt to change the pension system in areas of the public sector, especially for new entrants, the fact is that this area of government has become a sacred cow. The Provident pension schemes are very welcomed initiatives especially for people who previously had no pension prospects at all, but they are very modest indeed.

Helping the elderly is undoubtedly a very important part of what a government must do, and much has been done in this area over the past decade. But is a zero tax on occupational pensions really fair?

One thing is having a different threshold to workers, but why should a fat cat pension be tax free whist the people who really need support, such as young families, are caught everywhere by high costs.

In some sectors - the firebrigade and police notably - a person can actually earn more the day they retire than they have done at work because of the zero tax. Yet in days many retired civil servants have a second job for which graduates and unskilled workers alike compete in their dozens.

For the top brass with full service a pension (if the 25% lump sum is not taken) is regularly anything between £33,000 (eg a chief inspector) and £66,000 (a Chief Secretary) a year.

To put that in private sector terms, to purchase an annuity that would pay out a pension of £33,000 at 55 geared for inflation would leave you with little, if any, change from £900,000.

These pensions are in fact paid from the Consolidated Fund but as more people live longer a 'hump' is building on that cost which is carried by the tax payer.

Far from retiring and fading, a man or woman at 55 in today's world has a working future ahead of them - top jobs can be taken and employers can avoid the hassle of having to employ and build young staff.

Of course accrued rights have to be honoured, but terms and conditions can and should be reviewed be it the retirement age or through overall taxation on jobs above pensions when a certain threshold is met.

Investment in health - and, be fair, the GHA generally does a good job - remains critical to a huge number of people who are going to have to work until they drop. The way ahead must surely be in building social services and care for the elderly who need it and to whom money means increasingly less as they age, compared with being sure of proper care.

Our politicians need to look to the quiet people, the great 'unparitied', if they want to see where the balance has to be addressed. Instead of bludgeoning the GHA and Social services the Opposition should be saying how they would build on these services which, despite the problems that arise, have moved on hugely in the past decade.

If we want to have a Gibraltar that we can all enjoy then there is a great challenge ahead to avoid catching the Euro-cold. Many Gibraltarians have moved on to that world where a day's work is intense and jobs are more insecure than they might appear.

Can we afford to perpetuate the politics which so predominates life that the good we have may become difficult to enjoy?

The Greeks clearly couldn't.