Bid to hold off GST would hit motorists and companies

Tuesday 10 October 2023

Motorists and companies will be hit in the pocket; savings will be demanded of States committees, and the public sector pension scheme will be leant on, if an alternative to P&R's GST plan is agreed.

Deputies behind the Fairer Alternative approach tax plan from earlier this year will again promote a different path to the one advocated by Policy & Resources when the States debates next week how to make public finances sustainable in the long term.

Their  amendment calls for measures which include £4m. real-terms reduction in States spending in 2023; vehicle and parking taxes to bring in up to £15m. from 2025; £10m in revenue from the corporate sector generally and a further £10m. through a 15% tax rate on companies with global revenues of more than €750m; and a tourism levy to raise £2m. a year.

Pictured: Deputy Heidi Soulsby will propose the amendment to P&R's GST package.

It also looks at a reduced capital programme to the one preferred by Policy & Resources with much less borrowing, up to £100m.

And they want to take advantage of the Superannuation Fund, which pays for States employees pensions, being 107% funded by latest estimates.

The amendment would cut the States contribution to the defined benefit scheme part to nothing for two years from January 2024. This would make £76m. available for major projects, they say.

While if successful the package would mean no GST this term, there is already measures in place that mean it could come back if needed in the next Assembly.

Deputies Heidi Soulsby, Gavin St Pier and Sasha Kazantseva-Miller are behind the alternative approach.

Pictured: Deputy Sasha Kazantseva-Miller is backing the alternative approach.

"The deterioration in the States’ financial position has been building over time and requires concentrated action across multiple fronts to reverse,” said Deputy Heidi Soulsby. 

“Policy & Resources’ position is that GST is a solution to all of our problems and so they continue to present us with this black and white option. We believe a more balanced approach is not only desirable, but deliverable and less politically risky, and that is what we are putting forward.”

They estimate the amendment will provide up to £850m. for capital investment between 2023 and 2032.

“Introducing GST will not only cost us more than £90m but will consume a huge amount of internal resources and attention of the States for the next few years. This can jeopardise the momentum of the savings workstream that started so successfully following the approval of the Fairer Alternative proposition earlier this year”, said Deputy Sasha Kazantseva-Miller.

“Before we get the public mandate for significant tax hikes, we need to demonstrate we are in better control of public expenditure and have a plan for growth. That work is yet to fully materialise.”