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More options for filling the impending fiscal blackhole are now on the table with the Tax Review debate continuing today.
The States resumed debate on Policy & Resources' tax proposals yesterday, and again this morning, having failed to find a way forward last month after nearly three days of debate
Much of the first day of debate this week centred on putting more proposals into play, including a revised ‘fairer alternative’ package which was the main opposition option last time out.
P&R still backs its original plans, which includes a GST at 5%, but has itself come up with different proposals of its own in an attempt to ensure this States makes a decision on how it will address a £120m. shortfall expected by 2040 largely as a result of an ageing population.
Pictured: Policy and Resources are hoping to win support for their original proposals still.
Deputy Heidi Soulsby is leading what is known as Option D, which was born out of the ashes of the Fairer Alternative pitch she led last time out.
“What I'm seeing is a community where people are just exhausted by what's been going on over the last few months, they really didn't see much hope,” she said.
“They’re saying that we're talking the island down all the time. What hope is there for us if the people at the top are saying, ‘well, everything is a complete mess and we've got to tax you by an extra 5% of your living costs to be able to spend more on government’.
“I’m really bothered about that. It's not a populist comment I'm making, just what I see from my friends and colleagues. We're seeing the costs and the impact of what's going on and the depression people are feeling because of where we are. It’s about time that we built ourselves up and say what a brilliant place we are to live. The opportunities are fantastic, and we should be going for it. That's exactly what option D is.”
Option D relies more heavily of savings and a phased approach to revenue raising measures.
Pictured: Comments from States members during yesterdays meeting suggested growing support for Option D.
Deputy Peter Roffey led another choice, Option E.
“I do agree with everybody else that a no outcome result is to be avoided if we possibly can. But I have to say that I'm not actually convinced that we are going to avoid it. So the purpose of this amendment really is to insert what I would call a broom wagon in terms of that Tour de France, coming along behind just in case all the other options are lost.”
He has been a leading light of the supporters of the original package, and that backing remains, but asked himself what would happen if that failed.
Deputy Roffey said a real weakness of Option D was that it represented a smorgasbord of ideas that have bee garnered from the comments of other States members.
He feared some parts would be thrown out and it would be a diminished response for a really urgent problem.
He has instead proposed a two stage solution, with plans to raise £55m per year before 2025, and then leaving further evaluation of the fiscal deficit and other hypothetical revenue raising measures to the next political term.
The initial additional revenue would come from £20m of increased corporates taxes or charges, £10m extra from motoring, £6m extra from large properties, as well as investigations into a deferral scheme for TRP payments and States savings.
Option E retains the proposed social security reforms in other packages, but notes that an additional net contribution of £15m per year will be required to top up the public insurance fund to ensure its sustainability.
Both of these options were strongly supported by States members yesterday, and they will now form part of a wider vote on five tax packages later this week.
Debate continues today - consideration will be given to exempting food, clothes, and charity shops from GST, and whether to investigate a market-value-based property tax.
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