Increasing GST at any time will be little more than a single stroke of the pen

GST-plus is not going to bring about the financial stability this island so badly needs. Yes, the States have produced some pretty convincing figures, produced fancy documents showing how everyone will supposedly be affected. Even revealing that a vast number will supposedly be better off. Yet, how is that even possible?

I mean, if the States is looking to increase its revenue through taxation, in this instance through the introduction of GST. And introducing a lower tax bracket of 15% for those whose earned income doesn’t exceed £30,000 in order to offset GST. The figures that the States has produced seem to indicate that a vast number will be better off.

Surely if that is the case, that means rather than raising a great deal more revenue, the States are in fact likely to raise less. Those who would end up paying more, who are fewer in number, surely wouldn’t make up the shortfall brought about by those now paying less. And in addition make up the revenue the States claim is required to turn things around – and also stabilise the local economy.

I know that the States is counting on high earners and above contributing a greater amount in tax revenue through the introduction of GST. This is all well and good, but all of this is purely based on theoretical projections and financial figures which will be long out of date by the time that this all is in place. Even now, the figures that have been floated, are out of touch with the here and now. Nothing in this current climate is sitting still.

Introducing GST is going to cripple those who already fall below the minimum wage and receive no benefit from any tax allowance. Therefore, they’re already below the threshold to pay any income tax.

Yes, it appears, at least on the surface that the States has done its homework, but it’s not 10 out 10. The States figures are often found to be inaccurate. And they say that third parties agree with their figures, but then that is to be expected. They’re likely working from the same set. The only States deputy who is on the right wavelength is deputy Charles Parkinson. Zero-10 must go.

And yes, we’ve heard all the reasons why the States can’t or rather won’t rescind zero-10, which is fiercely defended by deputy Jonathan Le Tocq, who was one of the deputies behind its original introduction. What good does it do to be competitive with Jersey and the Isle of Man, if the island is incapable of supporting, let alone sustaining its entire population.

If the island’s welfare is of little or no consequence to the States as a whole, then as Deputy Parkinson has pointed out, we’re going to leave. And there are signs of that happening now and have been for some time.

Back in 2008, when the States introduced zero-10, Deputy Le Tocq was among the members who voted in favour. He, like all the States members at that time, knew then that introducing zero-10 would inevitably bring about the financial crisis that the island is now facing. Yet, despite this knowledge, it was introduced. Armed with this information, this advanced warning – what action did the States of Guernsey undertake to prepare for this eventuality?

Let’s start by giving the States some credit. In 2009 they made possible the introduction of GST. And then, sat on their laurels for over a decade. A whole decade and more, wasted. During that time the States had the opportunity to have eased or lessened the impact, even to have prevented the current financial crisis all together. Instead, having been foolish enough to open Pandora’s box, they were just too feeble minded to do anything.

Now, the inevitable has come to haunt us and the island is going to have to pay a heavy price if it is to survive. What happened to the old adage, a stitch in time saves nine? Had the States not dillied and dallied, instead of a heavy load, the load could have been light. One that would have kept the wolves from the door, not invited them in.

Until the States agree to rescind zero-10, Guernsey will never recover. Until the States either come to an agreement with Jersey and the Isle of Man or break ranks, matters will continue to get worse. And with the added influence of world events, unpredictable. Theoretical projections will continue. The only certainty is that the States will require to raise ever more revenue.

Once GST has been introduced, the States will be able to raise as much revenue as they so desire. Introducing it might have been a hard fought battle, but increasing GST at any time, will be little more than a single stroke of the pen. GST is basically the goose that laid the golden egg. With the introduction of GST, the States can milk the Guernsey cow almost unopposed and for all it’s worth.

How long before 5% GST becomes 6%, 7%, 10%; and how long will the new 15% income tax rate protect those on a low income from feeling the effects of GST?

As I said, it is based on a theoretical projection, a floating point of uncertainty. The quicker prices rise, the faster the 15% income tax buffer will erode, and then what?

Deputy Charles Parkinson is again, way ahead of the pack. Zero-10 has to go. Until such time, the island will never regain stability, the States will for ever require that we bail them out. And as long as we continue to do just that, so will they continue to overspend, without fear of consequences, they will likewise fund their ridiculous ideas and more, much more. Such as throw £4m. at a building that they then knock down little over two years later. There is no answer to such wastage of taxpayers’ money; this shouldn’t happen at any time.

The truth is that the only real answer is to do away with zero-10, regardless of just concerns that it will make it so much more difficult to be competitive. Then again, the States knew this before they decided to plunge the island into this bottomless abyss.

How much longer can the States continue scraping the bottom of the barrel – and if they don’t act now, there won’t be a bottom to scrape. Just as the States had over a decade to prepare for this eventuality, instead, stuck their heads in the sand, so it seems inevitable that they will do likewise with zero-10. Will the last person to leave, kindly turn the lights off.

JOHN DE CARTERET

17 Delancey Court

Rue des Monts

St Sampson’s