Ways and means

Is raising taxes the only way to fund public services? Horace Camp has some other ideas...

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I START my column today by reminding you of an idiomatic expression which, for my own protection against cancellation, I wish you, dear reader, to keep in mind if you choose to read any further.

If you are ready to begin, then I will reveal that the idiom is ‘tongue in cheek’.

This week, taxation has been troubling me somewhat and I have spent a considerable amount of my time pondering this hoary subject. Hoary because it is a very old and generally uninteresting topic with not a lot to laugh about. But in the last couple of weeks it has gradually become more of interest to me and certainly struck a nerve when Policy & Resources threatened to means test my States pension, formerly known as the old age pension. Yes, now the taxation debate is personal.

Taxes are needed to pay for the services the States of Guernsey provide for us. We all know this. Yet there is something that worries us about the services being delivered increasing year on year and the cost of delivery rising at an incredible pace.

Bringing means testing back into the game could be the right time for us to start with a blank sheet of paper and design a new form of States of Guernsey which can be forever self-sustaining and could indeed lead to a general reduction in taxes.

If we move away from the concept of an equal right to access certain services at zero cost to user at point of service, then it is possible to drastically reduce the cost of the States and to future-proof us against further rises in the cost of delivery.

Imagine if we adopt a safety net approach to government, in that the first choice for funding services will be ‘user pays’. Means testing will enable us to decide if the user can afford to pay for the whole service, some of the service or none of the service. Only the shortfall would be made up by the States from general revenue.

In addition to the safety net policy, we will also need to adopt the concept of the bare minimum level of service needed to be regarded as the safety net. In this manner those at the bottom of the pile could receive a perfectly adequate service, while those able to pay for a gold-plated service would be free to do so. This move away from gold-plated services for all will in itself account for vast savings.

How could this work in practice, you ask? Well, let’s take health. Let us say a user requires a vital operation which has been costed at £20,000. Many people could raise £20,000 by perhaps taking a loan against the equity in their home. Given that Boomers are most likely to be needing the operations and that they are sitting on vast piles of equity they have accumulated as much by accident as on purpose, they will be well placed to fund their own procedures.

Some may not be able to raise the full amount and a combination of reducing the gold-platedness of the procedure – perhaps a cheaper but slightly less potent anaesthetic – and a small States contribution will ensure the work is done.

Users with no assets – well, let’s not dwell upon that.

But as you can see from the example above, health care would be cut by a considerable amount and the budget for assisting the unfortunately impecunious and lame could be held at an acceptable level.

Then there is of course education. It isn’t cheap to educate children and if we assume a secondary pupil costs £10,000 a year to educate, then very few users will be paying enough tax to cover their children’s education. The obvious answer is to get those user parents to contribute what they can. Again, many parents could release equity from their homes to fund little Tommy’s time at school. As an incentive, those able to pay the full amount would be automatically offered indoor dining facilities for their children should the schools be too packed to allow all to eat under a roof.

Of course, care would be taken for those eating outdoors, with perhaps umbrellas made available for those whose parents can contribute some small amount to defray the costs.

We should also ask ourselves why exercise books and paper are not charged to pupils at a small premium. I’m certain many parents could afford to pay.

With the two money pits of health and education brought under control, the future will look much more rosy. But there are other areas which also need some attention to keep us in the black and Aurigny is just one of those. If the user has to pay, then we will need an Aurigny surcharge to be applied to all future flights. The surcharge will need to recover all previous losses as well as ensure no more money is lost. Means testing will ensure each passenger contributes a fair share of the surcharge and again perhaps an equity release scheme could be made available for islanders contemplating a return trip to Southampton.

And to ensure off-island travel is affordable for all, we could perhaps do a deal with the UK military to lend Aurigny one of those big planes once a month to allow 600 or so islanders on Aurigny benefits to get off the rock every now and again.

Yes, I’m starting to warm to the new vision for a means-tested system of service delivery – and perhaps some of the proposed borrowing could be spent on a couple of new workhouses?

Borrowing, that’s a bad idea. We probably need an infrastructure poll tax, perhaps supplemented with a window tax. The window tax would have to be by the square metre, which would really rake in the money from the new glass and steel eyesores popping up around the island.

People of Guernsey, we stand at the dawn of a new era. And remember, it can only get worse, because the next States is bound to be worse than this lot. Hard to believe, eh? Not any more.

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