Upbeat P&R head says island ‘can have it all’
THE ISLAND’S most senior politician delivered an upbeat performance in his effort to loosen the island’s fiscal strings, saying that Guernsey ‘can have it all’.
Debate on potentially tearing up the island’s fiscal rules was opened by Policy & Resources president Gavin St Pier.
‘I am upbeat, I am actually confident that we can have it all, we can meet the needs of our community whilst ensuring we remain a competitive low tax economy with a fair distribution of the tax burden.
‘To do so though is going to require the same planning and discipline as the States has exercised in the last eight years, it may be dull and painful, but it is effective, it is what has helped us deliver the stronger fiscal performance that we have seen in recent years.’
P&R is asking for permission to carry out a review of the island’s tax base, because it is considered too narrow to accommodate all the pressures on public spending, most notably from the ageing population and public sector pay.
At stake is whether the island can provide better public services, with more spending on things like hospitals and long-term elderly care, without jettisoning the island’s reputation for fiscal prudence.
A number of big-ticket items are on the horizon for the States which could ramp up public spending.
This includes the new drugs policy, new schools and long-term care for the ageing demographic, and States members were reminded that ‘nothing is free’.
The price tag on all those items is well over £100m. per year, and it is suggested that a sales tax, health tax, or a company profits tax, could be introduced to cover the cost.
In his speech Deputy St Pier returned to one of his favourite analogies – the ‘mythically inefficient spending dragon’.
He called for a realistic approach, adding that there was no dragon to be slayed, and no magic bullet.
However he was confident a balance could be struck that would be acceptable to taxpayers and the overall community.
‘The key question that needs to be addressed is what level of public services should be provided and how much tax are we prepared to take out of the economy and from the community in order to provide them.’
Debate will resume on the fiscal framework review today.
