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The Policy and Resources Committee has moved to salvage its Tax Review package as it faces an increasingly uphill battle in the States.
Debate continued this afternoon on an alternative approach being championed by Deputy Heidi Soulsby that a growing number of members have swung behind.
Her amendment would rule out GST this term and demand savings, while establishing committees to review the work the government does and of corporate taxes.
As debate moved late into the afternoon, P&R published a potential amendment to its own plans that would make a commitment to hold GST at 5% for a decade, limit spending next year while it identified savings and change States rules on how much money would be put aside for capital projects.
Speaking against the Soulsby package, P&R member Jonathan Le Tocq conceded it contained some good ideas.
"We're willing to incorporate some of them in our propositions," he said. But the amendment was not as progressive as his committee's plans, he argued, as he accused it of being "a bit of smoke and mirrors".
Some sort of consumption tax would be needed in the future, he said.
"I am really fearful that when we get to that place that we will be so pushed that we won't be able to do the progressive things that we have an opportunity to do now."
P&R is proposing changes to income tax thresholds and benefit contribution within its package.
"We know that we've turned over so many stones, can we really believe that substantial alternatives can be found to fill that hole that is clearly here in the funding?" said Deputy Le Tocq. "If it's not filled, then the burden will be on the lower paid and on middle income earners and we've been squeezing them for many, many years. I'm not willing to do that."
Pictured: Deputy Gavin St PIer.
He believed that some members were so opposed to the concept of any form of GST that they would embrace anything.
"That is a dangerous position."
Deputy Gavin St Pier has seconded the Soulsby amendment. One of its propositions to reduce the deficit is to change the rule which governs how much money is put aside each year for capital projects so that the target is 1.5% of GDP instead of 2% - something P&R indicated through its late amendment it was willing to concede.
"It does not change a single penny of actual capital expenditure," said Deputy St Pier.
He argued that there were savings to be made, with committees producing a 4.8% underspend against budget in 2021.
Work has already been done reviewing Health, Home, Education and the Law Offices that had not been actively progress this term, he said.
"This amendment will help us rebuild trust and confidence with our community by engaging effectively with them in this process. It will enable government to demonstrate that it has done everything it can before tax increases on households are needed."
He said it "unambiguously" took GST off the table for this term of government, which was all that the States could do.
P&R member Mark Helyar was strongly opposed to setting up a committee to review the role and size of government. "We simply don't need any more talking shops," he said.
Pictured: Deputy Mark Helyar.
Officers had put the cost of supporting the work at £2m, Deputy Helyar told members.
"This proposed committee would be an expensive exercise in navel gazing, which will do little but waste precious time and resources when we have neither two spare."
There were some things which were realistic, though, he said.
He would support exploring restricting the residency requirements on access to long term care, a requirement for private health insurance for older migrants arriving in Guernsey, restricting access to family allowance and means testing access to States pensions for those with significant income and assets.
"We know where cuttable costs are like these. We just need to get on with it."
Members should reject the Soulsby amendment and select those elements of the original propositions which they prefer, he said. Setting up a committee to review corporate taxes would simply confuse who was responsible for delivering fiscal policy, he added. P&R had already begun the work and wanted to come back to the States with firm proposals in November.
"A vote for this amendment is not necessary to get this work done. It simply extends the timeframe out further adding crucial uncertainty to business when we need maximum confidence."
The amendment seeks to keep in place changes to the Social Security contribution system. But Deputy Helyar said it would raise only £21m. in contribution revenue when £34m. was needed.
Debate continues.
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