Tax alternatives ‘fail to help the lower paid’, says ESS president
Failing to support the original tax proposals will represent a missed opportunity for a significant redistribution of wealth in Guernsey, according Employment & Social Security president Peter Roffey on the Guernsey Press Politics Podcast.
Deputy Roffey said the alternatives being offered by rival groups of deputies could not offer the same help to the lower paid as the Policy & Resources Tax Review policy letter.
Deputy Charles Parkinson’s amendment does not include the reforms to social security which Deputy Roffey had pushed for in his role as a member of the Tax Teview panel.
The proposals drafted by former P&R vice-president Heidi Soulsby include those same reforms, but Deputy Roffey was unconvinced about how those plans would be funded.
Listen to an in-depth interview with Deputy Roffey on the Guernsey Press Politics Podcast
‘I like the fact that it retains those reforms, but I’m blown if I know how they’re going to be financed under her scheme,’ he said. ‘Because really there’s almost no revenue raising proposals at all.’
The proposed changes to Social Security contributions include reform of the threshold for payment, so when the threshold is breached, contributions are made only on the income above that level, rather than from the first pound.
However, despite this, the increased rates will end up bringing in £19m. extra per year.
Deputy Roffey was keen to point out, however, that this was well short of the additional £34m. per year that actuaries had advised was needed in order to keep the pension fund topped up sufficiently to pay predicted future pensions.
That deficit has, for now, been addressed by a 10-year programme of contribution increases, which started two years ago.
Deputy Soulsby’s amendment, he said, did not adequately compensate for the loss of that future increase, which would leave the fund under-resourced.
He said he had been able to align himself on tax reform with the current members of P&R – so often his adversaries on other policy debates – only because of their agreeing to such a redistribution.
‘I was only willing to support it if we could really put together a package that was redistributive,’ he said, ‘and I’m really pleased we’ve been able to do that.
‘Where this package goes is to put a minority of the increased contributions on households. Far more is on businesses.’
The tax review debate is scheduled for the January States meeting, which begins on Wednesday.
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