Leadbeater to go ahead with motion which would park GST

The Home Affairs president has confirmed he will lay an amendment seeking to ‘park’ several of the package’s main elements until more information becomes available. Among the big-ticket items to be put on ice, for the time being, would be the introduction of a GST and changes to the income tax system. These include proposals for higher personal tax allowances and a new 15% tax band. The amendment seeks to label GST and the income tax changes as ‘reserved matters’.

If the amendment is passed, decisions on them will be delayed until the Policy & Resources Committee has reported back to the States on a wide range of matters, including the actual receipts received under Pillar Two corporate tax changes, and the progress being made on implementing spending reductions directed by the States Assembly earlier this year.

The ‘assurance report’ would also provide updates on the island’s demographics, the States’ investment performance, infrastructure requirements, and progress resolving administrative issues at the Revenue Service. However, the amendment would allow all of the other proposals in P&R’s fiscal package to go ahead.

Deputy Leadbeater stressed that his amendment was neither pro- nor anti-GST, but instead was seeking the quality of information needed to make a decision about it.

‘The policy letter relies upon a number of significant assumptions and future developments, several of which should become materially clearer during the proposed implementation period. The amendment therefore distinguishes between measures which have a freestanding policy, economic or fiscal justification and those which form part of the linked GST package. Its purpose is to ensure that the decision is based, as far as reasonably possible, upon actual receipts, delivered savings, updated forecasts and demonstrated administrative readiness rather than predominantly upon forward assumptions,’ he said.

Deputy Leadbeater said that waiting for clearer information would not tie the hands of the Assembly.

‘Following that report, the States would remain entirely free to approve the reserved measures, to approve them in an amended form, or to determine that some or all of them were no longer required.’