Guernsey Press

What we need is a fairer tax and benefits system

I AM not sure I agree with the opening paragraph of the Tuesday 17 January editorial that it is good news for Policy and Resources that some islanders, even political colleagues, are increasingly coming around to a GST tax but the weakening ones are not doing so just yet. True some critics ranging from Deputy St Pier to Dr Andrew Sloan are not against a GST in principle, but give no timeframe of when such a tax could be implemented or introduced, or what circumstances would proceed to support it.

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I agree though with the message and tone of the editorial that for most people, acceptance of the financial position of the States is growing, but there are criticisms of the specific proposals and underlying assumptions too.

I may support the Fairer Alternative but believe most of the efforts to reduce public spending will not succeed. Remember I have 25 years’ experience as a deputy and have seen many newcomers fail at their attempts to reduce inefficiencies and cut spending. If I had a free hand I would reduce spending but procedures, contracts of employment and the reduced role of a deputy all mitigate against change. In any case most of the expenditure is in health and education.

I am a champion of wise government spending and believe we will be a poorer and more divided community with austerity cuts. We also need government to invest more in economic growth and infrastructure.

I am supportive though of the need to 'right size' government and to have a big public debate on what the States should be doing. I believe if the process is properly done, even the critics of GST will realise we do need significant government spending.

I accept that many members of the island community are not yet satisfied that government is getting its house in order or that taxation is fairly distributed. This is partly a failing of policy and partly of communications. What is on offer with the tax and social security reform proposals needs to be embellished, amended and refocused to find greater acceptance.

I found a lot to concur with too in the letter by John de Carteret. I have often wished we could organise a snap general election and maybe our impasse on tax and spend should accelerate the contest due in 29 months’ time. I am a senior member of SACC, but like the author am uneasy with the situation whereby the States can remove an elected member for a year or longer. Have we the right to get rid of an elected colleague? However some supporters of GST may choose to retire at the next election.

However, although some elements of States budgeting for surplus and waste costs, for example, have been less than ideal, I would argue why we sometimes can’t keep our hands off the people’s cookie jar if it isn’t full enough. We are running a 'country' on a very low percentage of national island wealth.

States overspending is a problem but the main generator is not just our so-called ageing demographics. The cost of regulation and the competitive salaries of public sector employees and service providers is the main factor. The problem is not just the size of the island’s income but the fact that the income is quite low by western standards proportionately. Many islanders don’t feel that wealthy but that is because we under-provide some free services e.g. medical GP costs, and unfairly distribute the burden of taxation. I agree with Dr Sloan here too.

The black hole is not just £85m. to find. It is £85m. a year... every week of 2023, the Health & Social Care Committee will spend £4m. of your money.

I agree too with Mr de Carteret that we risk a huge brain-drain and loss of our younger people. However, although GST might be a factor, I would argue lack of economic growth, bureaucracy, lack of affordable housing, expensive connectivity and lack of arts, etc., will be greater factors. We need more productivity and wage growth in the private sector. I want to go for growth too.

I want to support a much fairer tax and benefits system but am not convinced we should rush a decision this month.

DEPUTY JOHN GOLLOP