Chamber backs P&R's tax proposal but calls for cost cutting and pension reform

Monday 02 October 2023

Policy & Resources proposed tax package, including GST, has won backing from a leading business group.

Chamber of Commerce members were sceptical when the proposals were first outlined at the beginning of the year, questioning the scale of the issue set out by P&R.

Its executive now believes those concerns have been answered.

“It's evident that P&R have listened to some of the views of Chamber in the plans they have published,” said Steve Rouxel, Board Director of the Chamber of Commerce.

“But the reality is undeniable, to fund our future, GST or higher income taxes, alongside tax reform and other measures are necessary.

“However, to say that P&R’s attempt at articulating cost savings was short of detail would be doing an injustice to the words ‘short’ and ‘detail’. 

“Alongside other cost saving measures, we would urge P&R to investigate the measures we propose, particularly civil service pension reform as a matter of urgency to achieve cost savings in line with global public sector pension reform developments.”

Chamber believes a major problem facing P&R is that GST has a significant public relations problem.

The Chamber executive belives that deputies who take the time to read the Billet and understand it, are more likely to be persuaded that action needs to be taken on tax rises. 

“Some may also be persuaded that GST is the right tax. However, P&R need to win hearts and minds of the public if they are to translate votes and that is a big task,” it said.

The Chamber executive agrees that Guernsey must accept tax rises or, it must further reduce what is already “insufficient investment into infrastructure and enter a managed decline of public sector services”.

“Managed decline or ‘live within our means’ options will see many of the services we take for granted and are proud of, such as our enviable healthcare system, be reduced. On the basis that managed decline is not a solution, out of the options set out, Chamber executive supports ‘scenario 3.’”

It has produced a detailed briefing document for its members, who it is surveying this week.

They are being asked whether they are convinced there is a significant gap between government income and costs; whether they support P&R’s tax package and whether there needs to be a clear path for cost cutting and pension reform.