The Policy & Resources Committee is projecting that in a few years’ time there will be a shortfall in States’ finances of up to £85million a year, largely as a result of long-term demographic changes, such as people having fewer children and living longer.
In 2021, the States’ senior committee asked deputies to back GST in principle but withdrew the proposal when it became clear during debate that it would be heavily defeated if pushed to a vote. Instead, the States approved an alternative proposal from the Committee to investigate other options, consult more and return to the States for another debate in July this year.
Ahead of that second debate, the Committee is now launching ‘Our Island, Our Future’ – a campaign of engagement with the community to explain the need for tax rises and promote GST as its first option and income tax rises as a fall-back option.
“Raising tax is a difficult topic. Nobody wants to pay more tax and certainly no sensible politician would want to raise it voluntarily,” said Deputy Helyar, who is treasury lead for the Policy & Resources Committee.
Pictured: Deputy Mark Helyar, the Policy & Resources Committee’s treasury lead.
“I’m not in favour of big government and high taxation. But we would be negligent in our duty to the public if we didn’t recognise the reality of the financial problems unfolding over the next decade. There is a limit to what can be saved without impacting essential services which government already delivers.
“The problems presented are not unique to the Bailiwick. But we have reached a point where essential services that people rely on will be put at risk if action isn’t taken soon.
“If government doesn’t face up to the cost challenges coming over the horizon, it will not be able to provide the next generation with the range of services and benefits which we enjoy today.”
Speaking at a media briefing which was also broadcast live to the Bailiwick, Deputy Helyar said that GST would be “spread across a much wider group of people rather than focusing just on the working population” and therefore that it would be “a fairer way of doing it”.
“All politicians, including me, know that GST is an unpopular option. But today we will explain a broader package of measures that spreads the tax burden as widely as possible. And which will actually reduce the amount of tax on our lower income households and pensioners while shifting more of the responsibility onto those in society who can afford to pay more, including the corporate sector.”
Pictured: Deputy Peter Roffey, President of the Committee for Employment & Social Security.
Deputy Helyar was joined at last night’s briefing by Deputy Peter Roffey, the President of the Committee for Employment & Social Security and a member of a political group which advises the Policy & Resources Committee on tax policy.
Deputy Roffey said he was opposed to GST for many years but could now support it to avoid swingeing cuts to public services – as long as other measures were introduced at the same time to assist poorer households.
“If GST is unpopular – and I understand it is – it’s nothing compared with what would happen if basic healthcare and pensions had to go down,” said Deputy Roffey.
“I’ve still got a slightly open mind, but of the credible options that we’ve gone through I decided something like six months ago…that it [GST] was the best option. But only with a radical change to our social security system…and it will be a real social change for the better. When I really saw that some months ago, that’s what really made me…able to argue quite strongly in favour.”
The other measures referred to by Deputies Helyar and Roffey and which are set to be proposed to the States alongside GST include changes to income tax allowances and social security contributions to create a package which they say would reduce the overall tax burden on the least affluent 25% of households as well as raising tens of millions of pounds of additional tax revenue every year.
More Express coverage of last night’s tax briefing:
Deputy Helyar rejects calls for P&R to resign if defeated on GST
States’ leaders insist GST can be made fair as well as raising millions