We went through a similar exercise in 2014. I was part of a consultation process when Professor Dominic Swords from Henley Business School concluded that we should not introduce a GST. Now is also not the time to consider introducing a GST until the economy is firing on all cylinders. We are miles off this at the moment.
The cost of GST collection is totally disproportionate to the amount collected. The cost is fixed no matter the level of income and is estimated at £800,000. I question this amount and that it should be nearer £1.5m. Yet more civil servants will be needed to implement the collection, when we should be trying to reduce the headcount in the public sector. If it is introduced, it is relatively much better to have a higher GST rate to offset against the fixed cost of collecting it. The cost to businesses is horrendous.
We are a population of 65,000 and one of the successes of Guernsey is that we have a high number of businesses that employ five people or less. Businesses do not want any more bureaucracy with no benefit to them whatsoever.
I am a great believer in offering alternatives rather than dismissing ideas. I agree we have to diversify our tax take, so I urge all deputies to consider the following:
n We need to grow the economy, so let’s increase the population by maybe a few thousand. The hospitality sector needs people now. So why not quickly remove all the relevant laws which are delaying the recruitment of people that the island desperately needs?
n Sort planning out so that the time taken for decisions is drastically reduced. The present delays are shameful.
n Bring back a motor tax. This needs doing anyway as more people are moving to electric vehicles. They use just as much of the roads as all other vehicles. There are 80,000 vehicles in Guernsey.
Make the tax simple at a minimum of £250 per car and £450 for 4x4s and high performance cars. Or use the same rates that the UK have so that the wheel is not reinvented.
Get the insurance companies to collect the tax so the cost of collection is minimal.
Estimated revenue is at least £25m.
It could be introduced soon.
The wealthy will pay more as they have more of the 4x4s and high performance vehicles.
n Paid parking – charge £25 for short-term parking and £200 for long-term (Monday-Friday) by paying for an annual parking clock which is a different colour every year – this would raise approximately £2m. per annum. Cost of collection is minimal. People pay £12 a day for parking at the airport.
n Increase TRP significantly, by as much as 50% for domestic houses. Again, the cost of collection is nil.
n Prescription charges should be increased from £4.20. They are £9.35 in the UK. Raise the age for free prescriptions from 65 to 70 as many people are now working beyond 65. Those who take early retirement should be able to afford the charges. Those on supplementary benefits do not pay anyway.
This would help to some extent in contributing to the costs of the Nice drugs.
n Increase bus fares from £1 to £1.50/£2. The incremental increase is less than the cost of a daily newspaper. Cost of collection nil.
Doing all, or some of the above, in particular a motor tax, would easily make it a very simple vote to throw out all three tax proposals.
16, Les Grands Loriers