States needs to get question right on tax

MAYBE Deputy Mark Helyar was right all along. When he said back in the summer that the States sub-group investigating options to raise taxes was seeking the answers to the ‘wrong question’, yesterday it turned out he was probably right.

Whether that was proved through political courage or political weakness, we may never know.

Certainly it was a pragmatic decision to 'pull' the tax review report. Policy & Resources did not have to make it. It knew that anything which could be considered a relatively marginal defeat for its proposals for some kind of goods and services tax could feasibly still enable the committee to work on a GST, sell it better, and bring it back to the States.

So it was unclear yesterday whether this move signals another (temporary) demise of a GST, or whether, by avoiding a comprehensive defeat in the States, the committee has actually saved the motion for another day.

And was it accident or design that after the politician had repeatedly said it was ‘two minutes to midnight’ for the States to make some tough decisions on taxation and public finances, he and Deputy Peter Ferbrache offered up their compromise amendment – to effectively rip up the propositions of the tax review report and start again – at two minutes to midday yesterday?

The move was broadly welcomed, not just by States members who, after some debate, backed it by approving the amendment.

Positively, it is an opportunity to take stock. Get things ‘right’. Come back stronger, more organised, more coherent, and surprising though it is that we need to say it, better prepared. Most importantly, as Deputy Helyar knows, the question must be right.

Next time, P&R should not be suggesting a raft of new taxes and justifying ‘headroom’ in GDP for more spending. The committee should now spend the next few months looking forensically at the expenditure side of its budget, to convince itself, fellow deputies, and the public, that it knows that every pound spent represents good value for the taxpayer.

Succeed in that, and then the ‘sales’ job on any new proposals should be much easier.

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