'GST is the only answer': Treasury lead reflects on States of Guernsey's £135 million deficit

The States of Guernsey's 2022 accounts paint a grim picture of the government's finances. Credit: ITV Channel

The States of Guernsey is facing a deficit of £135 million, according to the government's latest accounts.

The government previously announced many capital projects were being scrapped or scaled back, but the newly-published 2022 financial report sheds new light on the perilous state of the island's finances.

£88 million of last year's losses were down to investments, which could be recouped as markets bounce back.

The States also spent around £3 million more than it made last year, meaning the organisation is operating at a loss.

This was also the first annual report to reflect depreciation on States' assets - including land, buildings and equipment - meaning those figures cannot be compared to previous years.

Deputy Mark Helyar, the States' Treasury lead, painted a grim picture of the island's finances:

"We can't afford everything that's in the Government Work Plan. We simply don't have enough.

"Even if we were to start spending tomorrow, everything that's in our savings account, we couldn't afford to do everything that's on the list, so we're going to have to really start to prioritise."

  • Deputy Helyar says GST "is the only answer" to the island's financial woes.

He added: "It would be totally foolhardy for us to send all of our reserves, because if we spend all of the reserves we have no investment income, so we do need to find a sustainable long-term income stream, and in my view, as we put forward in January and February - GST really is the only answer to that."

Across the board, States-owned entities appear to have struggled financially last year - with Guernsey Water, Ports and the Dairy all recording losses.

Guernsey Post and Guernsey Electricity have outlined steps to address their predicted shortfalls.

However, Aurigny is back in the black - producing its best financial results in 15 years.

CEO Nico Bezuidenhout said: "We've done a substantial amount of work on cost savings and cost reductions, we've also managed to keep airfare inflation well below the general inflation.

"Current year performance is looking good and strong and we're looking to break even with a marginal profit in the current year as well."

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