In an early but narrow victory for Policy & Resources, Liam McKenna’s bid to defer the debate for up to two years was defeated by 17 votes to 22, setting up the likelihood of a three-day debate on the senior committee’s proposals and more than 20 amendments laid against them.
Deputy McKenna’s sursis, seconded by Deputy Mark Helyar, proposed obtaining advice from a new States treasurer, who is expected to be appointed shortly, and sorting out the vast backlog of tax returns at the Revenue Service before reconsidering whether to introduce a 3% goods and services tax and other tax reforms recommended by P&R.
‘The Revenue Service is 20,000 returns behind. Let’s give them a chance and then we can work out whether they owe us or we owe them,’ said Deputy McKenna.
‘We lost tens of millions on MyGov and £130m. with Agilisys, there was an overspend on the electronic patients system, and there is a projected overspend on the hospital extension. Surely we should show the community that we can be responsible with their money.
‘This package from P&R is about charging the community £50m. a year and yet we have a cost-of-living crisis and a housing crisis. I don’t get it.’
Speaking against the sursis, Tom Rylatt argued that it was ‘utterly vague and pure speculation’ to suggest that a new treasurer may have a different view of the island’s finances, and unclear who would decide whether problems at the Revenue Service had been resolved.
John Gollop saw the sursis as ‘a little bit of a lifeline’ and preferable to pressing ahead with a full debate on tax reform and running the risk of all the substantial proposals being thrown out. He described himself as broadly supportive of a consumption tax and claimed the sursis would at least keep the idea alive for another debate in a year or two.
Deputy McKenna withdrew the threat of a motion of no confidence in P&R, after several supporters of his sursis distanced themselves from the idea in debate, among them Jayne Ozanne.
‘This sursis is not about avoiding difficult decisions. It is about making sure that when we make them we have both the evidence and the public confidence needed for those decisions to endure,’ said Deputy Ozanne.
‘I have significant concerns about what I call our trust gap with islanders, which significantly dwarfs our funding gap. Trust must be earned. It is built through our record and not our rhetoric.
‘This sursis is an opportunity to demonstrate that we are responsible with islanders’ money and that we can deliver, and only then ask people to accept one of the biggest changes to our tax system for decades.’
Deputy David Dorrity criticised previous Assemblies for delaying decisions on tax reform and urged his colleagues not to repeat the same mistake. Deputy Neil Inder said he would vote against the sursis because the next States treasurer would have no more power than previous treasurers to alter the course of public finances even if they wished to do so.
Deputy Garry Collins, supporting the sursis, could not see how the States could embark on a major restructuring of taxation while the Revenue Service remained in such a critical state. Similarly, Deputy Chris Blin argued that there was insufficient confidence in the States to make radical changes to the tax system and that more time was needed to put that right.
P&R’s treasury lead, Charles Parkinson, warned of increasing risks to the island’s credit rating, which influences the cost of borrowing, if the Assembly once again deferred decisions about tax reform, and claimed that delay would achieve nothing.
‘The problems are not going away and they are not going to get easier to resolve,’ said Deputy Parkinson.
‘Please don’t submit to the temptation of further delay. We would simply be presented with the same difficult decisions in a year’s time. We need to get on and do this so that we can start more of the work delivering the service improvements and infrastructure which this island needs.’