Guernsey Press

‘Nothing has changed, our finances are unsustainable’

POLICY & RESOURCES has again defended the need for a goods and services tax, despite the States expecting to end the year about £18m. ahead of budget.

Deputy Mark Helyar, left, heading to the States yesterday with Deputy Sam Haskins. (Picture by Luke Le Prevost 32568642)

The senior committee urged caution on interpretations of government finances although critics of its tax plans have said that the better-than-expected figures would not help the committee’s case.

P&R treasury lead Mark Helyar called on former P&R vice-president Deputy Heidi Soulsby, who commented on the financial figures, to recognise the financial problem the island still faced.

He described the financial update as ‘a small piece of good news’.

‘The latest financial position really changes in no way at all the financial pressures we’ve been stressing need to be addressed in order to end the unsustainability of public finances,’ said the P&R treasury lead.

He said that, while being £18m. better off in terms of revenue surplus compared to the budgeted position was good news, it was a tiny variance against a £600m. revenue budget.

‘If anything, it says we’re broadly in line with where we expected to be. Furthermore, the funding and investment plan that we will debate in October is based on these same figures.

‘It is misleading to say these figures in some way change the challenges we face or the modelling done to inform the proposed solutions, when they are literally the same figures.’

He added that the revenue surplus did not include any investment in the island’s infrastructure, which he called a ‘huge part’ of the problem the island faced.

‘We have a big backlog of essential infrastructure projects that we need to invest in. Our hospital, education, and for me the biggest one, housing.’

‘The States has under-invested in this area for years, and if we carry on we won’t have the kind of infrastructure islanders deserve, or the kind of infrastructure that will encourage further growth in our economy.’

Deputy Helyar said that if P&R was to spend the 2% of GDP agreed by the States on capital projects, the revenue surplus would quickly become a deficit.

‘We need to stop hiding the reality of our unsustainable financial position from the community. Any States member who wishes to put forward their alternatives needs to make sure it actually addresses the problem.

‘An alternative solution that means we’re still in an unsustainable and therefore worsening position, is no solution at all.’