Guernsey Press

‘GST is just a sticking-plaster’

The cost of government is rising faster than we can earn more money to pay for it – and introducing GST will not change that, argues Horace Camp.

Last updated

REGULAR readers, those with the fortitude to have waded through my 198 previous sermons, will know that I regularly raise the issue that I am frequently misunderstood.

That is because I am primarily a slippery little beggar who rarely nails his colours to the mast but also because I often support both sides of every argument. However, for today only I am going to give you my view on GST.

I will start by praising P&R for devising, in principle, not detail, a first class option for introducing GST into our lives. Option 3, P&R’s preferred option, is as good as can be expected from a social democrat government. It takes from the rich – rich being not what you think – and gives to the poor. It is a Robin Hood GST. It takes more from the ‘rich’ than is strictly necessary to allow the States to keep a portion for itself – let’s call it commission – before distributing the largesse to Mrs Le Page from Torteval.

I honestly couldn’t imagine even the bleeding liberal heart of Deputy St Pier coming up with a more charitable version than this little gem.

Frankly, if GST was the solution to our fiscal problem, I would be behind it like a shot. The kindly influence of Saints Roffey and Le Tocq is certainly present in the recommendations and I can even imagine that soft-hearted old socialist, our own beloved chief minister, had a hand in it as well.

However, I do not believe GST, no matter how kind and progressive it may be, is the answer to our problem. Or at least not a long-term answer to our problem. It is, I’m afraid, yet another can-kicker that modern politicians love. It does nothing more than give us a quick fix. But those highs will soon wear off and the next dose will need to be substantially more to give us the same effect.

GST, in this case, is the solution of the addict. We need to define the problem. And it’s quite simple to do that. Every year we expect the States to spend more on us. However, every year we are not getting any richer to pay for it (collectively).

I’m going to use an analogy which will drive my feminist daughter up the wall. Imagine the States is a housewife and you are the man bringing in the money. Every week you give her the housekeeping money and in return you expect a clean and tidy house and three meals a day ready the moment you walk through the door. One day you are chatting to your neighbour in the big house across the road. His wife calls him in for dinner. ‘What are you having?’ you ask casually. ‘Steak,’ says he.

You go in for your tea and see it is Spam and chips. ‘I want steak,’ you shout, banging the table with your fist (a perfectly acceptable behaviour back then). ‘If you want steak, you must give me more housekeeping,’ says the wife. ‘But I won’t be able to afford my eight pints of beer on a Friday night!’

That is basically where we find ourselves. We want steak dinners but are only willing to pay for Spam.

To bring it back to an island scale, most of us can’t afford steak, so we expect our rich neighbours to pay for theirs and the difference between Spam and steak for ours. This can work, until the rich neighbour gets a big pay rise and will only eat Kobe beef. Then you expect Kobe beef and will settle for nothing less. You could be asked to make an increase in your payment to cover both of you having Kobe beef. But you haven’t had a promotion. If you pay more for Kobe beef you have to cut down on your drinking sessions, which you don’t want to do. You have a bright idea. What if we keep the shared payment based on steak? Steak is good, I like it and it supplies the nutrients I need. If he wants Kobe beef he can pay the difference himself. After all he can afford it. I hear he has a fancy for Alma’s caviar, if he expects me to help pay for that as well, then I will be broke.

That is how GST will end up. The States will only serve the most expensive options on the secondary healthcare platter and the delicacies will get more and more expensive over time. Which means that GST will have to continue rising until our economy (wage packet) grows at the same rate or more.

I’ve probably lost you by now and I expect many of you are wrapping wet tea towels around your heads to cool your brains after trying to follow my torturous reasoning. It’s quite simple really. The cost of government, principally healthcare, is rising faster than we can earn more money to pay for it. There is no sign of that rate of increase decreasing or our economy ever growing again. So one way or another the States will need an ever-increasing share of the money in your pocket.

The UK has the very same problem and even though it pays for its government by creating money out of thin air, which we can’t, it also realises it cannot continue to provide healthcare free at the point of use. The question that should have been put to us before we were asked about GST is are we willing to give an ever greater proportion of our earnings to the States of Guernsey to continue offering secondary health free at the point of use?

If the answer to that is yes, then tell your favourite deputies to vote for GST. Option 3 is a fair and even better than average GST proposition and must sail through, hopefully unanimously. Be very aware that the rate will have to increase and/or the benefits reduce over time because the cost of healthcare is always going to grow at a faster rate than our economy.

If your answer is no, then urge your deputies to vote it down and to start drawing up a plan to remove the cost of medical care away from the States and on to the user. Personal responsibility for your own body when you can afford it can be achieved without denying basic treatments to those who can’t. Life-time loans like student loans in the UK, compulsory health insurance supplied by employers and health grants are all ways of transferring the burden of cost to the user while still maintaining a safety net provided by the taxpayer to ensure everyone receives the treatment they need (not necessarily the treatment they want).

The States can continue to provide medical services but possibly it wouldn’t be able to compete on price with other medical service providers in other countries. In fact, competition could make our medical system more efficient and even a source of economic growth if we attracted medical tourists here.

If you aren’t prepared to shoulder some of your own, or even all your medical costs, then support GST. But be aware that the problem will get worse if we don’t treat it once and for all.

GST is a sticking-plaster temporary fix, but I warn you when it is ripped off it will hurt like hell, the wound will be purulent, malodorous and more difficult to heal.