‘Calm before the fiscal storm’ Budget approved

NEXT year’s Budget, described as ‘the calm before the fiscal storm’, was approved comprehensively by deputies amid numerous warnings of higher taxes in the years ahead.

Deputy Charles Parkinson. (Picture by Sophie Rabey, 28815758)
Deputy Charles Parkinson. (Picture by Sophie Rabey, 28815758)

Taxes on cigarettes, alcohol, petrol and property will rise only in line with inflation as the impact of Covid-19 continues into 2021.

Mark Helyar, the treasury lead on Policy & Resources, said there were massive challenges to come, but there were also opportunities which required them to be brave.

Challenged by another deputy on his political party’s [the Guernsey Party] manifesto position on no tax increases, Deputy Helyar clarified that this had been an aim.

‘If he had attended any of our hustings, he would have heard me say to the public it’s a wish list and I have to say it’s not possible to deliver it given what I see from the financial circumstances we’re in. We have to consider additional taxes and we have to consider a wider tax base.

Deputy Peter Roffey, who is in charge of two senior committees, welcomed the Budget because he said that taking any more money out of the economy would have induced toxic shock.

‘This is a holding Budget and I support it being a holding Budget, but it is also something else, it is the calm before the fiscal storm.’

He warned against relying on a rapid recovery and added that ‘reckoning is coming’.

Deputy Charles Parkinson continued with the mood of foreboding and he was worried about the consequences of under investment in critical island infrastructure.

The lively debate turned into a see-saw between those who felt a need for a dose of reality and those who saw opportunities on the horizon.

Scrutiny Management president Yvonne Burford highlighted that the Budget represented a £36m. increase in spending, which included £12m. of extra spending that was not related to Covid-19.

Her committee had also spotted a massive amount to be spent on IT within the States, and she wanted to know more about what it was for.

‘This is a total of £78.5m. of spending allocated within this Budget on information technology alone, this appears to be potentially in addition to the £20m. previously agreed for the electronic patients’ record system in Health & Social Care and £17.1m. previously agreed for the Revenue Service transformation.’

Policy & Resources president Peter Ferbrache appealed for a united front, and he said it was the right Budget for the moment, and he was confident the economy would rebound.

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