Spending is being paid for through hidden indirect taxes. Zero-10 has also disproportionately hit local working people and businesses whilst other organisations benefit from paying no tax at all. This has to stop. A fundamental review of our contributions, benefit and tax structure is essential.
You hear Deputies talk about the fundamental spending review and that spending won’t be allowed unless there is funding behind it. However, in practice this has meant that they vote in the spending they like and then find a way of funding it that increases the burden on the local Guernsey people.
I understand that our finance sector has to remain competitive in the global marketplace. However, under zero-10 the Guernsey people are the ones paying for the current spending.
We have already been told that the introduction of statutory maternity leave should be paid for by a 0.2% increase in contributions. Social Services Department wants to bring in a new supplementary benefit structure that they envisage will require a 2% increase in contributions. Added to this the pressure on our healthcare and pension provision as the result of an ageing population and it is easy to see how contributions may rise further.
I do not believe that GST is a fair answer to our funding problems. It increases the proportion of income that the poorest in society are obliged to spend on essentials such as light, heat and food. In addition, as a new tax, it will have a cost to establish and a cost to collect, as well as adding yet another burden to beleaguered small businesses and almost certainly causing more local businesses to go under. We already have tax mechanisms in place that are designed to collect tax according to income and we should be reviewing how best to use these before wasting taxpayers’ money on more bureaucracy.
I want to see a fundamental review of our funding structure and the development of a smarter fiscal system than we have at present.