Guernsey pandemic impact contributes to £56m deficit

Guernsey is facing a £56m budget deficit in its public finances by 2025 says the Bailiwick's government.

The coronavirus pandemic had a "significant impact", said Guernsey States.

The announcement sets the ground for a debate on the government's priorities in July and in September.

Chief Minister Peter Ferbrache said the States had made decisions "without any real idea of how they'll be funded" and now "there isn't any more money".

Providing business support, testing and vaccination has all hit finances said the States.

Today's announcement is all about setting the stage for a discussion later this year on States' priorities.

The message from the top table - pick your priorities, and choose them wisely.

Guernsey's financial picture is bleak, but compared with other jurisdictions, things look far rosier.

But, the black hole is there and the question now is how it will be filled when in September the States discusses tax?

Goods and Services Tax? 0/10 reform? Paid Parking? All options are on the table.

Mr Ferbrache said: "While we continue to deal with the very immediate crisis of the COVID-19 pandemic, we cannot lose sight of this looming and very serious challenge.

"If we do not prepare now and make some difficult decisions, it could prove to be even more of a crisis than the pandemic itself."

States-owned airline Aurigny is expected to be £19m in the red by the end of this financial year because of the pandemic.

States Treasurer Bethan Haines said: "They've had a very difficult two years and we are hoping that will reverse.

"They have a new management team in there and so we are expecting them to bounce back in terms of their revenues."

Deputy Mark Helyar, Treasury Lead of the Policy and Resources Committee, said there had been a "lack of financial discipline" among States committees.

He was "not at all" in favour of raising taxes, but balancing the books was a "huge challenge" and "all possible options" were on the table, he said.

"I would prefer to save some money, but we need to look at the other options," he said.

"We have to cut our cloth to suit."

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