More than 2,500 years ago, Confucius understood what every government must learn – that without the trust of its people, it cannot stand. Indeed, he famously taught that of the three essentials of government – food, military capability and public trust – the first two could be sacrificed, but trust was indispensable.
This is the principal reason why I find myself unable to support the introduction of GST, notwithstanding the carefully considered mitigation measures intended to protect those on lower incomes from its impact.
Although I have significant concerns about the robustness of some of the underlying analysis – not least the estimated size of the ‘funding gap’ given the assumptions made regarding Pillar II – those concerns are, in my view, secondary to a much more fundamental issue. A substantial number of islanders simply do not trust their government on this matter. Many have genuine concerns about how GST will affect them, both immediately and over the longer term, and they are not persuaded that the proposed mitigations will in the end adequately protect them.
The response from government to these concerns has, in effect, been: ‘Trust us; the impact will be much less severe than you fear.’ Unfortunately, however, that is simply not enough when public confidence has been significantly eroded by islanders’ own experiences.
People judge governments by their record, not their rhetoric. The difficulties with the Revenue Service, the delays in delivering MyGov, and the substantial losses associated with the Agilisys contract have all contributed over these past few years to a loss of confidence in our government.
The consequence is a significant loss of trust. Even with a new Policy & Resources Committee that has sought to be open about past failings and transparent about the steps being taken to address them, rebuilding public trust takes time. It cannot simply be asked for – it must be earned.
It is this ‘trust gap’ that concerns me far more than the projected ‘funding gap’. After all, all long-term forecasts are inherently uncertain, particularly because of the assumptions they contain. Moreover, I have never been persuaded that the financial forecasts on which these proposals rest are sufficiently robust to justify the biggest change to our tax system in generations. The repeated revisions to the expected Pillar II revenues illustrate why caution is warranted. Perhaps the behavioural assumptions involved with these calculations will prove correct – but we simply do not know yet. That uncertainty is precisely why confidence in those forecasts matters so much.
Indeed, it is these factors that explain why I, too, have a trust gap. Mine relates to the confidence I can place in the forecasts themselves. Ultimately, that can only be resolved when we see whether those behavioural assumptions are borne out in practice over the coming year.
Much ink has been spilled setting out the case both for and against the current set of GST proposals. At times, the debate has felt like a Wimbledon final, with arguments volleyed back and forth between politicians, interest groups and islanders alike. Yet for all the exchanges, I fear we have been playing on the wrong court. The contest that matters most is not whether there is a funding gap. It is whether government has earned the trust required to persuade islanders how best to address it. That is the real Centre Court.
If islanders are to accept a permanent new tax, they must have confidence not only in the forecasts, but in the transparency, judgement and ability of government to deliver such a fundamental change.
The trust gap has practical consequences too. Even if people were persuaded of the economic case for GST, many simply do not believe that the States has the capacity to deliver such a complex reform smoothly and effectively. Given the difficulties encountered in delivering a number of recent major projects, that scepticism is hardly surprising. Confidence in government’s ability to implement change has been weakened, and that confidence cannot be restored by assurances alone. It will be restored only by demonstrating, through successful delivery, that the States can once again be trusted to implement major programmes that affect the lives of every islander.
There will, no doubt, be a range of amendments proposed next week. Some will seek to narrow the debate, others to refine it, and some to replace the proposals altogether. But all, in my view, miss the central issue – before we ask islanders to accept a significant new tax, we must first rebuild their trust in government. Without that trust, no package – however well designed, however carefully modelled or however skilfully presented – will command the confidence that such a fundamental change requires.
If trust has to be earned, then our priority should first be to earn it. That means demonstrating, through our actions rather than our promises, that government can deliver. It means fixing the problems within the Revenue Service, successfully implementing major IT programmes, and showing that our financial forecasts are reliable by comparing them against actual Pillar II receipts. Only once that confidence has begun to return should we begin to consider asking islanders to accept a significant new tax.
So, next week my focus will be on addressing the trust gap that sits at the heart of this debate.
Trust begins with keeping your word, and that means remaining true to the commitment I made when islanders elected me to represent their concerns. On this issue, that means continuing to oppose the introduction of GST.
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