‘Fairer alternative’ is dismissed as tokenism
Policy & Resources president Peter Ferbrache has dismissed as ‘tokenism’ one of the main proposals being offered as an alternative to a goods and services tax.
The new tax has been presented as essential by P&R, in order to ward off a predicted structural deficit of £100m. by 2040.
However, former deputy chief minister Deputy Heidi Soulsby has set out what she described as ‘a fairer alternative’, in which she has argued that ‘a large part of the modelled structural deficit is the assumed capital requirement of £76m. a year’.
Among the measures she espouses is to reduce the amount of money Guernsey is assuming it will spend on capital projects every year from 2% of gross domestic product to 1.5%, thereby reducing by the predicted annual shortfall by £19m.
Listen to a full interview with P&R president Peter Ferbrache on the Guernsey Press Politics Podcast
However, speaking on the Guernsey Press Politics Podcast, Deputy Ferbrache said he was unconvinced, as the percentage was being offered only as a minimum.
‘It is not a proposal that adds any value,’ he said.
‘If it meant anything, of course I would support it, but it doesn’t mean anything. It’s tokenism.
‘If they really meant what they were saying, they would say it should be 1.5% and no more, unless you’ve got a specific project, then you’ve got to come to the States in that particular year and say we’re going to rebuild X or Y and we need £200m. for that – whatever the figure might be – and that needs to be paid over the next three or four years. That would be a better and a more honest way of dealing with it.’
Since the minimum spend was set, Guernsey has frequently spent well below the 2% target, in part because of limits in the capacity of local companies.
Deputy Ferbrache also faces opposition to his committee’s tax proposals in the form of a sursis – a delaying motion – from Deputy Carl Meerveld, which was submitted yesterday, and an amendment from former Treasury minister Charles Parkinson, which seeks to increase corporation tax.
Either of these would sweep away P&R’s substantive propositions, as would Deputy Soulsby’s amendment.
Other amendments from Deputies Rob Prow, John Gollop and Aidan Matthews seek to alter P&R’s existing proposals.