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GST debate rolls on

GST debate rolls on

Wednesday 25 January 2023

GST debate rolls on

Wednesday 25 January 2023


Debate on whether to introduce a tax package that includes GST will continue after members rejected the first attempt to take it off the table.

Deputy Carl Meerveld, who has been at the forefront of the anti-GST campaign which saw thousands of people march on Sunday and hundreds protest on the steps of the Royal Court as members walked in this morning, proposed a delaying motion.

His sursis motive would have meant spending up to £750,000 on a report with three models on the size of government and the levels of service it provided.

A GST would also have been excluded until 2040, but the move was defeated by 29 votes to 10.

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Pictured: Anti-GST protesters outside the Royal Court building.

Deputy Meerveld argued that the States needed to take a top down approach.

He accused Policy & Resources of taking the easy way out with its tax review proposals.

"It's avoiding the hard conversations by saying, 'let's reach into the public pocket to pay for our ever growing government.'"

At virtually every States meeting there was a new policy letter introducing a new piece of legislation, benefit or new services that increased costs, he said.

"What we should be saying to the people if Guernsey is what size and style do you want? And can we afford it and how much are you willing to pay for it?"

Simply resorting to taxes should be the last resort, he said.

Deputy Meerveld wanted to look at fundamental change in the system.

The sursis motive would not stop anything other than the decision on GST, he said. "We can still progress with work."

P&R would be directed to have conversation with States members and the public about what they required from government, he said, reporting back with three options on its size and services provided.

"There are no sacred cows, we have to look at all of it and engage with the public."

It could be a hard discussion, he said, predicting that any time you wanted to reduce a cost or outsource someone in the community would disagree.

Home Affairs President Deputy Rob Prow immediately spoke against the suris, which had a "wishy washy and vague intent".

He accused those behind it of not knowing what they wanted.

"The Assembly must have a full debate and today, we need to make difficult decisions."

Deputy Rob Prow

Pictured: Deputy Rob Prow was the first member to speak about delaying decisions on tax.

Deputy Sasha Kazantseva-Miller said it was right that the size of government needed to be looked at. But you also needed to consider the spending side and also the opportunity for benefit reform and the need to raise revenue today.

The approach in the sursis was too simplistic, she said.

Health & Social Care President Deputy Al Brouard believed that while people were not shouting about it, they wanted bigger government.

"They want smaller class sizes, more cancer car drugs, more community policemen."

He was not saying the States could not be more efficient, but they were going to struggle to reduce or take services away.

Rather than have hard conversations, he urged members to "do their job and make hard decisions".

Economic Development President Deputy Neil Inder pointed out that the States already spent £35m. in grant funding outside operations like Overseas Aid, Guernsey Finance, the colleges, Guernsey Training Agency, the Alderney PSO and Guernsey Retail Group.

He was not supporting the sursis, because everyone in government would want to protect their our own areas.

Deputy Aidan Matthews

Pictured: Deputy Aidan Matthews.

Deputy Aidan Matthews would have backed a referendum. He supported the sursis because of the need to establish what people wanted.

P&R member Deputy Jonathan Le Tocq took hope that there was a growing realisation that they needed to find solutions to a growing emergency.

But the sursis was not the answer, he said.

"It's naive to think that this will manage to solve the problem or get anywhere near it," he said. "We need to make savings, but in addition to things that are already there in our propositions."

Deputy Lyndon Trott said it was important to look at the disparity in the amount of tax Guernsey took as a percentage of its economy compared to Jersey and the Isle of Man. It was 22% compared to 26% in Jersey and 29% in the Isle of Man. 

He did not favour a GST as there were potentially better measures.

"We haven't invested enough time and effort in explaining to the public how much public services actually cost," he said, giving the example of the tax take from a couple of average earners with children not going far enough to educate one child for one term.

Deputy John Gollop was drawn to the sursis, although he was opposed to the thrust of Deputy Meerveld's argument that government needed to be smaller

A weakness of P&R's campaign had been the lack of public engagement over two years of the appropriate size of government and level of service, he said.

Deputy Chris Blin explained why he was seconding the suris as he is opposed to GST.

"This sursis is the chance to continue debating the other amendments but not include GST."

Deputy Nick Moakes said that business hated uncertainty.

'This sursis is a minimum of two years of uncertainty and probably longer."

Deputy Chris Le Tissier told the States that people expected UK level of services but were only prepared to pay Guernsey level of taxes, so there needed to be a public debate on what people were willing to pay and what services they would demand. He backed the sursis.

P&R member Deputy David Mahoney said the one thing the sursis did not do was definitively take GST off the table, although it did give it "a mighty boot into the distance".

It was odd to suggest the P&R policy letter was an easy route, he said.

"Easy looks like deciding to decide later," he said.

Under the sursis, a decision on the size of government would be needed just before the General Election, something that would not happen, he said.

Deputy John Dyke argued that the situation was serious but not a crisis - there was time to deal with it. Spending as a percentage of GDP was drifting upward and sustainable solutions were needed to prevent that, he said. He was inclined to vote for the sursis.

Deputy John Dyke

Pictured: Deputy John Dyke believes there is time to deal with the forecast deficit.

P&R member Deputy Bob Murray said that there was a crisis because Guernsey could not afford its health service now and it also needed to make arrangements for the future. He questioned how the committee could come up with three options for government, arguing what the sursis wanted was undeliverable.

"We do not have enough resources already," he said.

The last few days had felt like an election campaign, according to Deputy Sue Aldwell, sparking many emails opposing GST. Sitting on committees she now understood what cuts would mean to the Island.

"This is not just about GST, but about a suite of measures in which 60% of people would be better off."

Deputy Simon Vermeulen said there was a lot in the sursis saying that there were savings to be made. But he questioned deputies appetite to make them.

Employment & Social Security President Peter Roffey was brought to his feet by those comments.

All committees had been asked by P&R what savings they would make if budgets were cut by 5%, but Home Affairs, which Deputy Vermuelen sat on, said that could not be done.

"The result of this sursis is clearly just an absolute fudge of a delay," he said.

In asking members to reject the sursis, P&R president Peter Ferbrache stressed that the work proposed in the sursis would cost between £500,000 to £750,000.

"We were elected to make decisions," he said.

How they voted: 

For: Chris Blin, David De Lisle, John Dyke, John Gollop, Chris Le Tissier, Aidan Matthews, Liam McKenna, Carl Meerveld, Lester Queripel, Simon Vermeulen. 10

Against: Sue Aldwell, Al Brouard, Yvonne Burford,. Tina Bury, Andy Cameron, Lindsay De Sausmarez, Andrea Dudley-Owen, Simon Fairclough, Steve Falla, Peter Ferbrache, Adrian Gabriel, Sam Haskins, Mark Helyer, Neil Inder, Jonathan Le Tocq, Marc Leadbeater, David Mahoney, Nick Moakes, Bob Murray, Victoria Oliver, Charles Parkinson, Rob Prow, Steve Roberts, Peter Roffey, Alex Snowden, Heidi Soulsby, Gavin St Pier, Andrew Taylor, Lyndon Trott. 29

Abstained: Sasha Kazantseva-Miller.

Read more ...

Act now on tax call from Ferbrache as States losses mount

WATCH: Highlights from the GST rally

Deputies urge P&R to drop GST plans

Thousands say 'no to GST'

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

 


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