‘GST will be back on table at some point’
THE prospect of a second GST debate this year has not been ruled out after the senior States committee revealed a £4m. funding shortfall in its slimmed-down Government Work Plan.
With the Policy & Resources Committee also planning to borrow to fund capital projects, it admitted that a bid to encourage States committees to cut back their policy aspirations had saved just £750,000 this year – and would be replaced by £4.8m. of spending over the next two years.
If the States backs this new plan, then funding schemes will be considered in September, and there is speculation that consideration of a goods and services tax could be back.
P&R committee member Bob Murray, a convert to GST, said he did not know if it would be included in a States report. But he admitted that GST could be before the States again at some point.
‘GST was always going to come back,’ he said.
‘Even many of the members who voted against it on the last occasion, have previously been on record to say that they supported GST, because in truth it is a strategic move.
‘GST has considerable merit – whether it comes back this term or the next term, it will be back on the table.
‘Maybe we didn’t convince people sufficiently or explain it sufficiently. Because of the way it was structured, the people who are earning more money will pay more, which meant that the people that have less money were actually going to be better off.
‘But that message was totally lost at that stage. To be perfectly blunt, the well was poisoned. Members of our own Assembly poisoned the well, so we couldn’t have a sensible debate so that people could understand that, actually, this was going to make some people far better off than they currently are.’
The work plan, published today, does not mention GST specifically, but states that ‘the longer-term financial position is unsustainable, the principal committees and States members need to accept that government will need to ask taxpayers to provide more funding to the States now’.
P&R once again outlined the pressures on States funding caused by demographics in publishing the new policy developments.
P&R member Deputy David Mahoney said that the £4m. extra funding needed could come from changes to motor tax, paid parking, additional corporate tax, or further cost savings.
Committee vice-president Deputy Mark Helyar said the island had four choices.
‘Wait and hope to build up the revenue reserves, but we’re not making any surpluses, so that can’t happen, or we borrow, or we don’t do them, or we change the tax system to allow for more revenue, which is what we suggested at the beginning of the year.’
‘None of us want to put tax up, but we do have public services to pay for, and if we don’t do something about the revenue position, then those public services will be shut down.’
