Move to take GST off the table this States term

Policy & Resources wants the Assembly’s provisional backing later this month to include food in a new goods and services tax, if it decides to go ahead with GST-plus following a major debate about public finances due in June.

But two deputies – Liam McKenna and Simon Vermeulen – published an amendment yesterday which proposes taking GST off the table for the rest of the States term.

‘The effect of this amendment is to give clear indication that the States does not support the introduction of a goods and services tax and to halt any work being undertaken to introduce a goods and services tax,’ they said.

P&R’s treasury lead, Gavin St Pier, admitted that trying to debate tax on food-only was awkward, but he urged the Assembly to avoid ruling out a wholesale consumption tax.

‘We know how uncomfortable it is having the debate in this order,’ he said.

‘It’s not easy for us, it’s not easy for the community and it’s not easy for States members, but we’re seeking to discharge our responsibility in the most responsible way that we can.

‘The message that we’re seeking to give States members at this stage is that, although they may not like this, we need some direction on what GST could look like and therefore they should view it as what would be the least-worst option from their perspective.’

Deputy St Pier said that the major debate in the summer would allow all issues relating to public finances to be considered at the same time, including spending levels and capital investment, whereas making a decision now on GST alone would repeat errors made by previous States.

Tax and public spending are likely to dominate the political agenda this year, as the States battles to deal with a black hole in public finances projected to be growing towards £100m. a year.