Tax change and spending cuts to be debated by Guernsey States

Guernsey's civil service could be cut, if politicians agree to create a new committee to oversee the changes.

Such a move is among various ways of saving government money being considered, alongside proposals to help the island raise revenue through taxes.

The deliberations are part of a tax review which will be put to the States of Guernsey for debate in September.

Treasury lead Mark Helyar said decisions needed to be made "urgently" to reverse problems faced soon.

He said: "Unfortunately, the can has been kicked down the road for so many years now in terms of some of the long-term funding issues that we don't have a lot of time."

Deputy Helyar, who is heading up the review for the Policy and Resources Committee, said there needed to be a "government-wide plan to stop wasting money".

He added some "taboo subjects", including pension universality and population, needed to be examined in detail.

Alongside a potential hike in income tax and the introduction of a goods and services tax (GST), Guernsey's States is now being asked whether another programme of spending cuts is needed.

Policy and Resources is asking for each States committee to put a member on a new group to identify where cuts can be made as part of the Tax Review 2021.

It comes as the island looks to see how it can bring more money in, with government spending projected to rise in the coming years.

The States is set to debate three options put forward by Policy and Resources, two of which include introducing GST.

Former chair of Guernsey Finance Dominic Wheatley said GST was not a good solution, as it was a "regressive" tax which "disproportionately affects those on lower incomes".

Susie Crowder, from accounting firm Grant Thornton, who took part in a review published two terms ago recommending GST, said the current tax base was unsustainable.

She said that while any "tinkering with tax policy or taxation generally is a courageous move by any politician, I do think it is entirely necessary".

"The situation is becoming much more alarming as our demographic continues to age," she said.

The States said that, by 2040, it was expected there would be more than twice as many people over the age of 84 in the bailiwick as today.

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