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Defending the so-called 'Fairer Alternative'

Defending the so-called 'Fairer Alternative'

Friday 20 January 2023

Defending the so-called 'Fairer Alternative'

Friday 20 January 2023

The deputies behind the so-called Fairer Alternative tax plans say their proposals would be better for Guernsey's international reputation than the official plans.

Policy and Resources wants to overhaul tax and social security systems, introduce a goods and services tax and make other changes.

Under the Fairer Alternative, Deputies Heidi Soulsby and Gavin St Pier say they want to make savings before introducing new personal taxes.

Their plans have come under fire from P&R who have said they want to cut capital expenditure on key infrastructure which the island needs to invest in.

Deputy Soulsby has said in an open letter published by Express today that is simply not true. 


Pictured: Deputies Soulsby and St Pier presented their ideas to the media last week.

Instead, Deputy Soulsby says their plans would see the States committee to spending £57million every year on direct capital expenditure, which she says hasn't been done since Guernsey Airport's runway was resurfaced over a decade ago.

She has acknowledged there will be delays in any new capital projects due to constraints with construction firms being short staffed and booked up for years in advance.

However she said capital expenditure also includes IT programmes as much as buildings and that investment has been left to decline across the board over recent years.

"Much play has been made of the S&P report referencing capital expenditure and the under-investment," she said. "What it really wants is assurance that government is in control of the issue and has a plan to deal with it. 

"As I hope can be seen, far from cutting capital expenditure, what we are saying is that government needs to act as a grown up, understand its limitations and plan accordingly. Only that way will we manage to make the investment we need see the light of day."

Deputy Soulsby has been supported by Deputy Sasha Kazantseva-Miller who says she will back the Fairer Alternative during next week's Tax Review debate.

“The projected deficit is a product of both expected expenditure on public services and revenue expectations," she said. "It’s essential that we can demonstrate to the community that government is playing its role in addressing the deficit and that we have a pragmatic and staged rather a slash-and-burn approach to achieving it.”


Pictured: Deputies Sasha Kazantseva-Miller and Heidi Soulsby.

Deputy Kazantseva-Miller wants to see a commitment to investing in capital expenditure but with a realistic outlook at what can be afforded and can be achieved over the short and long terms.

“By assuming a figure of £57m of additional annual capital expenditure required going forward provides an ambitious but more realistic short-term forecast for the purposes of deficit calculation. 

"This is because the P&R figure of £76m is calculated on a GDP of £3.8bn which is 20% above the most recent GDP available (£3.178bn – 2022 Facts and Figures) and so is inflated. This forecast also does not seem take into account the capital expenditure within the existing committee budgets such as road resurfacing, vehicle replacement and property maintenance, so it must be double-counting needed expenditure. It does not consider alternative financing methods including public private partnerships. It is not based on any actual planned and costed capital expenditure needs. It does not take into account the need to amortise capital expenditure over its lifetime, something that we may hopefully get with IPSAS accounting in the future. 

"Therefore, we believe that a revised assumption of £57m is entirely realistic and will increase expected spend compared to any year in recent history including this political term. “A Fairer Alternative” will also undertake to review if this assumption needs to be amended based on evidence and actual island needs”.


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Parkinson makes the case for corporate reform

CIT suggested instead of GST

Alternative tax package promises greater States savings

Social security changes help poorer families and 'middle Guernsey'

Tax plan includes 5% GST - but P&R says most families will be better off

Why States leaders STILL think GST and tax reform is needed

"Unacceptable" and "damaging" service cuts if States reject GST


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