Tax decisions must be right for the long term

I wrote this letter as president of the GSCCA as the local body that represents the interests of the accountancy profession in Guernsey and this is a large association of some 1,000-plus members working in practice, the finance industry but also in 'real' businesses on the island as well as the public and voluntary sectors. It is difficult to get consensus when you represent the individual members as we are an association of individual members, but our executive committee is of one mind on the content of this letter.

Firstly, both of these departments are to be applauded for their foresight to work together to lay the groundwork for this report and to get it published for debate. I now see that the proposals on universal benefits will be deferred to come back to the States later as a Green Paper. Overall that seems sensible as if we are to take away universal benefits, then people do need to have an idea of what the replacement system looks like, whether this be means testing or some other mechanism. We absolutely do need to make sure that the benefits system is directed at all in our society who are truly deserving of help at the right level.

What is now needed is a sensible debate on the wider issues surfaced by this report. Primary amongst these is the issue of our ageing population and the impact this now has and will starkly have on what we will all require from government in the way of services in the years ahead, the cost base of that government provision and its impact on the tax revenues required to fund these services. Business creates the wealth and jobs that in turn create the tax revenues for government to spend that in turn helps to preserve the quality of life and standard of living that we have on this small island.

All aspects of the local business community have in general supported the debate around this report. Deputies must in my view resist the temptation to unpick the remainder of the report scheduled for debate as if this is what will happen then we are back to the drawing board, election looming in 2016 and we won't see a debate again until well into that new term. Crucial time lost in our journey for a sustainable tax, pensions and benefits system that is fit for purpose for our island.

This is a time for those that advocate our 'consensus style of government' to walk the talk with the consensus reached by those at Treasury and Social Security.

I also applaud the strong links made to population management in the report. Without the right and more-liberal people strategy, government can talk all it likes about re-basing the tax and benefits regime but that argument is only one-dimensional and unbalanced.

I am encouraged by the island plan recently released for discussion as we are now seeing the start of land being released for social and affordable housing and just the idea that we need to think about proper development on the island and its location. This will help to keep people being able to live and work here and to provide housing for those that we all in business know we need to entice to come and work in Guernsey. I have also mentioned our need to be able to keep talented non-local people and their families here for longer as our current housing licence system does not work for lots of businesses.

So I am an accountant and I am not expecting any sympathy. But let's change the focus a little and talk about teachers, nurses etc. and their valuable contribution to society. These professions are also impacted, I am sure, and I am baffled that we as a society would allow the uncertainty over the term of a housing licence to get in the way of being able to cast our nets widely to recruit the best-qualified professionals for our children and our health service and, more importantly, retain them when they are here and doing excellent jobs.

Can we really convince ourselves that we can attract the best teachers and nurses if they can only come here for three to seven years and then have to leave even if they are performing to a high level?

If our States deputies make this debate a focus on GST, that would be missing a real fundamental opportunity to have the right debate for the future viability and level of public services we want on this island, for the right size of the civil service and government and making sure that we have a sustainable economy. We are an open economy in a very competitive world and we are small. These are broad issues, but all need to be tackled as one. If the signal is that GST or other measures proposed won't wash, then let's see the States deputies come up with some compelling, positive alternatives and a continued desire to keep costs in line.

Mark my words, the population management and taxation issues we are now facing need to be addressed now and not kicked down the road until it is too late and we need to take even harsher measures.

I have said before that not every aspect of reports and strategies will be liked and you know what, that is just life. We all need to note when we are letting self-interest get in the way of making the right and strong decisions for the longer-term wellbeing of the island rather than the easier decisions for the short term.

JOHN ROCHE, Guernsey Society of Chartered and Certified Accountants president