Deputies who rejected GST told to re-examine the issue
DEPUTIES who rejected a goods and services tax in their election manifestos last autumn have been encouraged to re-examine the issue and consider mitigation measures that would be implemented to help people on low incomes.
Analysis of the manifestos and statements of the successful candidates in last year’s election shows that the majority baulked at GST, and only eight of them were open to the idea of considering it.
Of those eight successful deputies, only one said he had supported it back in 2015 and thought it could be a progressive tax.
Deputy Mark Helyar, who has become the public face of tax reform in his role as treasury lead for Policy & Resources, acknowledged that he also stood in the election on a platform of low taxation.
‘I still believe in a smaller government and when you write a manifesto, particularly if you’re new, it’s really important to tell people what your beliefs are.
‘The problem is I only have one vote, there are 39 other votes, so actually what’s written in a manifesto is really a wish list anyway and that’s the same for all candidates. I’ve been given a very responsible position and I think it’s really important to fulfil that honestly and openly and transparently with the public.
‘Since I started in the role I’ve found that things are much worse than I expected they would be from a structural perspective, and that the costs going forward are really quite significant and we need to now start doing something about correcting that or we could find ourselves in a much more difficult position.’
The main criticism of a GST is that it is inequitable because it has a greater impact on the poor than on the rich.
However, it is suggested that mitigation measures can help to offset the tax.
For instance, under an 8% GST, it is proposed that personal tax allowances could go up from £11,875 to £14,000.
Under a 5% GST the personal tax allowance would increase to £12,700.
Deputy Helyar said the lowest paid would be protected.
‘I’m confident that these proposals contain those mitigations and that’s why I’m not exactly happy about it, but they’re the least-worst option.
‘We are lucky that we’ve had a great insight into the way things have developed in Jersey over a number of years now, it’s really bedded down there now and they seem to be working quite well. So we’ve had the opportunity to model what we’re doing on what has worked well in Jersey.’
Deputy Helyar anticipated that there would be calls from deputies to reduce spending instead of taxing more, but unless deputies are willing to consider other radical ideas, such as means-testing the States pension, that looks unlikely.
‘This is where the rubber hits the road,’ he said, as he delivered his sobering analysis of the island’s financial situation.
Increased taxes are only part of the solution to tackling the black hole, he said, alongside public service reform and economic growth.
