Please show your workings
SO FAR, so utterly predictable. Policy & Resources, seeing the writing on the wall for the proposals within the Tax Review, regroup and come up with, surprise, surprise, an alternative plan.
It’s an uncomfortable reminder of how a myopic obsession with a goods and services tax has, from the start, dogged, and may ultimately still even derail, the Tax Review.
In the summer of 2021 an opening proposal of GST, an increase in income tax, or a ring-fenced health (income) tax was doomed almost from the start, given a lack of political enthusiasm for increasing income tax. The second, stronger bid for GST fell away when P&R grabbed the ‘corporate tax’ lifebelt.
Then we ended up with the final iteration of the Tax Review proposals. Final, that was, until both the public and deputies decided they weren’t too keen on it.
P&R has recognised that changing horses at this point is a political imperative. Although the committee has said it wouldn’t resign in defeat, for political longevity, a win of some sorts needed to be found.
One understands that the committee needed to take a single, solid, proposal to the States, not a menu of options, but islanders have a problem not just with the GST solution to fund the annual deficit, but with the committee’s workings too. Now, at last, possibly prompted by others, it’s primed to act.
Which reinforces the argument that GST was the simplistic solution to a knotty problem. Now the committee is doing the hard work of pursuing an alternative, but whatever they come up with should have been on the table 18 months ago.