This tax review debate is far from finished
WHATEVER spin politicians might try to put on it, a decision this week by the States to adopt higher taxes and/or GST will have one certain outcome – making islanders worse off. Stripped of rhetoric, the ‘review’ proposals have just one aim – to take money off locals and transfer it to a rapaciously free-spending government.
Whether, as treasury lead Deputy Mark Helyar initially stated, the wrong question was being asked of the tax review steering group seemed to be reinforced by Dr Andy Sloan’s contention that the 3% ‘headroom’ to raise taxes to 24% of GDP is a ‘mirage’.
The former States economist’s critique highlighted deficiencies and misunderstandings that fed into the tax review panel reaching the conclusions it did, outlining a particularly costly variant of computer science’s GIGO – garbage in, garbage out.
The States in response has defended its figures and also states: ‘The argument about the size of the “headroom” ignores the more fundamental problem – the gap in funding for public services exists, regardless of whether the States gives itself more or less “headroom”.’
This is disturbing enough for those on the receiving end. The worry this week is what the Assembly will make of what looks like a less-than-comprehensive review, which ignores as many areas of potential revenue-raising and cost saving as it addresses.
We do see the demographic and financial challenge. But in terms of the size of government, we hear little more than it will be difficult to make any kind of savings which overcome the need for higher taxes.
This week we should hope that the tax review debate – which is granted additional scope for free-form raising of ideas due to its green paper status – does not divide on party lines and actually contributes to all elements of what should continue to be an ongoing debate.
By any definition, multiple fund-raising stones have been left unturned. So islanders deserve better than to have a ‘whipped’ vote on something so important.