GST alternative would see reduced benefits and a new transport tax in Guernsey

People in Guernsey who claim benefits could receive less money if an alternative to GST is passed.

Policy & Resources have published 'Option B', which provides another choice for States Members who disagree with the introduction of GST.

Thousands of islanders have spoken out against GST, and an amendment to cut spending rather than introduce the tax was voted out in the States two weeks ago.

The alternative model proposes a series of measures that would raise around £60 million.

These include:

• Raising an additional £34m through social security contributions, through increasing contributions, reducing allowances or restricting entitlement to contributory benefits (or a combination of these options)

• A 50% increase in Tax on Real Property (TRP), including investigation of a scheme for deferred payment to mitigate impact on low fixed income households

• Transport tax, potentially including distance charging, motor tax or paid parking

• Investigating corporate tax reforms in consultation with industry and the other Crown Dependencies to raise up to £20m

• Savings of £16 million in public spending

There is also an 'Option C', which would see more than £31 million cut from public services.

Deputy Peter Ferbrache, President of the Policy & Resources Committee, says:

"We’ve put together an Option B that we hope States Members feel they can support, if they really believe they cannot vote for any package that includes a Goods and Services Tax no matter how progressive it is overall.

"Option B is a viable package that can raise enough revenue to ensure essential services, but it is a more blunt approach, that does not help those on lower incomes.

"It is however better than the third option, which we’ve defined more clearly in this amendment but is still effectively taking a hatchet and slashing public services in a way that would inevitably impact the lives of Islanders."