Author Topic: JEP supports GST  (Read 1831 times)

Jason the Maverick

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JEP supports GST
« on: April 05, 2008, 06:33:31 PM »
GST clears the final hurdle

FEW, if any, taxes are popular, and GST, which will now be introduced on 6 May, has already shown itself to be less popular than most in many sectors of Island society. The 19,000-signature petition against the tax offered a powerful indication of the strength of public opinion on this issue. In addition, it was evident in the States earlier this week that at least 17 States Members were of the opinion that GST is to be introduced prematurely.

To their credit, however, most members of the Council of Ministers have stuck to their guns on the new tax, consistently maintaining that it is a necessary evil if we are to weather economic storms that are still likely to break as other fiscal changes take effect.

This week’s debate, during which Senator Len Norman sought to put off GST for a year, examined the idea that Jersey is currently doing far better than expected and that surpluses mean that a delay is warranted. There was some merit in Senator Norman’s publicly popular — and populist — view, but his proposition’s ultimate defeat was nevertheless justified.

The point is that the approach urged by Treasury Minister Terry Le Sueur, and backed without reservation by a majority of the Council of Ministers, acknowledges the importance of the precautionary principle. It is possible that the Island will continue to do much better economically than has been forecast, but this is by no means certain. There are many scenarios in which GST will not be some sort of optional extra but absolutely vital if our books are to balance.

In spite of this, GST and the manner of its introduction remain real causes of concern.
It is, for example, worrying that for far too long there was a failure to realise that the original plan to bring in GST on 1 May could have led to chaos among businesses.

The present arrangements, which allow a long weekend of preparation, will offer at least some chance of a smooth transition to the new system.

Meanwhile, the real dangers of GST lie not in its introduction at the rate of three per cent.
After the three years at which the rate must be pegged, our political representatives will have to exercise great restraint if hikes in the tax are not to be seen as the instant answer to all future revenue shortfalls.

Does the JEP really believe this will stay at 3%?  And the extra week to prepare comment is a laugh.

Offline Deputy Dawg

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Re: JEP supports GST
« Reply #1 on: April 05, 2008, 10:52:10 PM »
I believe some politicians are betting on the GST not being as noticeable as predicted so that they can stay in their seats in October. No doubt projects that have been on the back burner which were at the request of the public will come forward as paid "thanks to GST" such as the year 2000 town park, new youth projects etc. It is the only way I can see of these ministers being in agreement when they know it is their job at the end of the year, maybe there is a project for each that was to have been delivered during their office (but wasn't) and they will now use GST to find the money. I can't honestly see why they would vote for GST unless they are out of touch that the states chamber is the only place they get information.

My biggest gripe with GST is that if the politicians had not let the public servants increase unchecked over the last 20 years and our expenditure was cost of living plus 5% growth, we would not even need it (in fact we would have some to put away in the rainy day fund and our cost of living would undoubtedly have been lower). GST Is therefore effectively paying for Public Servants, and the reason that it is as a raisable tax threshold is because they do not know at the moment how much the cost is of all these final salary pensions.

Take one police officer in the news lately. Now it is believed that he is on over £100k pa and has server nearly 10 years. His pension on contract is 75% of final salary when he retires at 55. Assuming he lives to 85 (which is not uncommon) he will earn over £2.2M (I believe linked to cost of living it will probably be much higher). now multiply that by the number of States employees on final Salary pensions, and you probably have more than the cost of GST. Over the next 3 years, how many more public servants will be employed on final salary pension (or part of) and how many will have retired. Remember, for each one that retires, one more (usually 2) is employed to take their place costing more money.

Thats my tuppence worth (increased from a penny for GST) on the real reason I believe this has been brought in.

Offline boatyboy

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Re: JEP supports GST
« Reply #2 on: August 01, 2014, 09:37:03 PM »

Administering any country requiring hospitals schools, police and other infrastructure is an expensive business. It is also a balancing act between taxing and spending. Tax too much and you stunt growth and expand the black market and take on dept, tax to little and the Government is accused of undermining services that should be readily available but cannot afford.

Government's responsibility is to put in place a workable economic structure that enables businesses to be successful and expand where possible, thus employing more people and pay reasonable tax to fill the coffers. What Government should not be doing is competing with the very businesses that provide work and tax revenues. To do so is cronyism and weighted against private business. Government can increase taxes to make up the shortfall for it's mistakes. Private business goes bankrupt clearly this is not the way to proceed.

Government has an obligation to be transparent and accountable to it's people regarding the spending of THEIR money and not be wasteful or extravagant.

Of course no Government gets it perfectly correct. The labour party threw extra billions at the NHS and when a few years later a report on progress showed very little had been achieved. What the report did show was an increase in pay for existing staff and an increase in managerial staff.

The thoughts leading to this post come from a posting on Tony's blog. Taxes on property are being looked at as new income stream to fund States objectives one of which is filling the black hole that has happened due to the States being unable to contain spending and unable to stop themselves investing in projects like developing office blocks or property like Heritage lets ( at enormous public expense ) and doubling up on well paid states management by using quango's.

There is really no excuse that can be offered by the treasury or economics ministers. They have revolving doors of highly paid consultants to advice, but are obviously just incapable of running a sweet shop let alone an island economy.

Expect a new property tax everyone that lives in a property on Jersey as testament to a failed administration.

I do not agree completely with Roger Bale but he makes some excellent points.

Offered to readers of planetjersey with Roger Bales full permission.

THERE are only three things the States can do which people individually, collectively, corporately or co-operatively cannot do better themselves.
These are defense (i.e. the protection of our borders, including island sea defences); Law and order (including courts and prisons); and the enactment of legislation to ensure fair play.,980.msg12493.html#msg12493

All credit to Tony's musings and Roger Bale.


« Last Edit: August 01, 2014, 09:38:38 PM by boatyboy »