Deputies voice support for ‘fairer alternative’ to tax plan
A goods and services tax ‘could easily become the go-to money tree’ was the warning from the vice-president of Economic Development yesterday.
Speaking in support of the ‘fairer alternative’ amendment submitted by Deputy Heidi Soulsby, Deputy Steve Falla decried the lack of any encouragement of additional productivity in the Policy & Resources policy letter and asked: ‘Where’s the spending restraint?’.
He quoted a Channel Island businessman who had commented that it was ‘morally wrong to tax food’ and referred to surveys carried out by the Chamber of Commerce and the Institute of Directors, which appeared to show a great deal of scepticism in the business community as to the necessity for a GST.
Quoting – without naming – a ‘well-known banking figure’, with whom he had been in touch on Wednesday evening, he claimed Guernsey’s reserves were as high as £1bn, and that the island’s apparent financial position was skewed by idiosyncratic accounting which perennially overstated the problem – by as much as £84m. in 2021.
Podcast: Simon De La Rue and Matt Fallaize recap day two of the tax debate on our 'Shorthand States' round-up
‘To vote for the amendment is not “no decision”,’ he said.
‘It is making a decision to tackle the problem in a balanced way and take an informed view on whether the adoption of GST is right for Guernsey,’ he said.
Deputy Sasha Kazantseva-Miller, speaking as one of the architects of the alternative, confirmed the corporate levy element had been a result of her input.
She claimed the amendment would leave the island £41.5m. better off through not having to go to the expense of introducing the new GST.
Environment & Infrastructure president Lindsay de Sausmarez highlighted inequalities already present in Guernsey and claimed no amount of mitigation could prevent GST being regressive in the long term.
She described the Soulsby amendment as the only alternative – given the likely failure of P&R’s plans – to a future of substantial budget cuts.
Deputy Lester Queripel, who put his weight behind the public ‘Say No To GST’ campaign, claimed that with the failure of Deputy Carl Meerveld’s sursis, the Soulsby amendment represented ‘a lifeline for the members of our community who are worried sick about a GST being introduced’.
‘It’s our responsibility to find other ways to raise the money that we need,’ he said.
Also in support was Scrutiny Management president Yvonne Burford, who praised P&R for its work but argued it would be impossible to institute a GST before the next election without it subsequently being overturned. She therefore felt the Soulsby amendment was the best alternative.
Deputy Aidan Matthews confirmed his support for the alternative suite of proposals, with the exception of closing the public servants pension scheme to new entrants from 2025, as he felt this was not – and should not be viewed as – an effective cost-cutting measure.
In offering his backing, Deputy Adrian Gabriel tried to calm fears over the revenue-raising measures, such as a proposed cruise ship carbon tax, and said islanders had been contacting him, saying they would rather pay more in income tax or adopt paid parking, than accept a GST.
Reluctant support came from Deputy Chris Le Tissier, who urged P&R to come up with some kind of compromise solution, failing which he pledged to vote in favour of the Soulsby amendment.
Former chief minister Lyndon Trott’s support was also equivocal. He said GST was ‘dead in the water’, meaning the P&R proposals, despite their merits, were no longer relevant.
‘It’s all about the art of the possible,’ he said.
‘To walk out of this assembly with nothing will reflect extremely badly on us all collectively.’
Deputy Simon Fairclough demanded more information that had been promised about the capital project portfolio.
‘How can I, as a States member, look islanders in the eye and tell them I will impose new taxes on them, when I’m not even aware of what we’re committed to spend and the vagaries of our accounting systems?’ he said.
Near the end of a day wholly focused on the amendment, seconder Deputy Gavin St Pier countered criticisms.
The proposals to cut budgets by 1% – excepting health – in 2024, and 1% overall in 2025 were realistic, he said, in the context of recent budget underspends.
In relation to concerns about the impact on tourism, cruise ship levies and visitor charges would bring in less than the £6m. predicted to be raised from visitors by GST, he said, and were therefore unlikely to be damaging to the industry.
‘This amendment will help us rebuild trust and confidence with our community,’ he said.
‘It unambiguously takes GST off the table for the duration of this term of government.’