Tax review is a strategy of hope

READ the Policy and Resources report on its tax review and two things stand out – there is no guarantee the significant increases proposed will be a once-and-for-all financial solution, and planning for meeting the imbalance of expenditure over revenues should have started years ago.

What is also becoming apparent is that debate on this topic struggles to get beyond ‘raise more money’.

Whatever the lead politician on the case might claim, meaningful economies don't appear to be on the agenda.

In turn, this begs the question of for whom the island is run. A letter on this page from a respected financial services expert this week showed comprehensively that ‘average’ Guernsey people would pay less tax in the UK than here and that their costs of living would be substantially cheaper.

Whatever the reasons, the expense of running the island is well outside the ability of Mrs Le Page in Torteval to afford. She cannot magic up pay rises and is dependent on others to shoulder the load.

Yet Scrutiny research showed that at least a fifth of all islanders experience in-work poverty – no sleight of hand with GST or attempts to mitigate the impact on the least well off will change that.

The brutal reality is that ‘prosperous Guernsey’ is a myth for thousands of islanders and their needs are under-represented by an Assembly that’s now effectively asking not whether taxes should increase, but by how much.

Running a community of just 63,000 as though it was a micro-equivalent of the UK is an expensive business. Just ask Alderney or, to a lesser extent, Sark. Economies of scale matter and aren’t available to small islands, which is why Jersey is struggling with its new hospital.

In business terms, Guernsey plc is also struggling, with costs rising, revenues under pressure, and growth prospects uncertain, which has started to alienate core stakeholders and shareholders.

In short, as an ailing corporate, it would be ripe for a takeover, radical restructuring and significant cost reduction. Politically, however, it’s a case of keep doing the same things that created this mess in the first place, while hoping for a better outcome.

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