P.2022/112 Proposition 5A OPTION E (As inserted by Amdt 16)
5
II
Committee
Policy & Resources Committee
Proposition
OR, IF “2, 3, 4 OR 5 ARE NOT APPROVED
5A. OPTION E
To:-
a. Agree that the States’ revenue budget faces a very significant structural deficit but that the challenge of agreeing a single package to resolve the forecast £85M medium term shortfall has proven too politically challenging to be achievable, and that therefore it needs to be split into two tranches, with the first approved by this assembly, and the second by the Assembly of 2025-2029;
b. Direct the Policy & Resources Committee to report back to the States by November 2023 with detailed proposals to raise up to £20M in increased corporate taxes or charges;
c. Direct the Policy & Resources Committee to report back to the States by November 2023 with proposals to raise an additional £6M in property taxes, with the focus on raising the bulk of such sums from the largest properties;
d. Direct the Policy & Resources Committee to investigate and report back to the States on the introduction of a property tax deferral scheme which could be accessed by those for whom TRP bills could induce hardship;
e. Agree that, despite the high duty currently on motor fuels, taken in the round Guernsey taxes motoring very modestly compared to many other jurisdictions and that the total quantum of such taxation should be increased from circa £20M per year to circa £30M per year;
f. Direct the Committee for the Environment & Infrastructure and the Policy & Resources Committee to report back to the States by November 2024 with detailed proposals on the best way to implement the increases in motoring taxes referred to in e. above;
g. Direct the Committee for Employment & Social Security to implement the proposed reforms to social security contributions as set out in section 8 of the policy letter;
h. Note that the proposed reforms to social security contributions will only raise an additional £19M per year, compared to the additional £34M per year which the Government Actuary has estimated is needed to make the insurance funds sustainable and therefore a net contribution of £15M per year will be required from general revenue;
i Direct every States committee to consider how they can make revenue savings by efficiency measures, service reduction, or outsourcing, and to instruct the Policy & Resources Committee to set up a sub-committee to co-ordinate these efforts;
j. Note the revenue raising measures set out above will only raise circa £55M per year [before any revenue savings] and as such fall short of the predicted medium term revenue shortfall;
k. Direct the Policy & Resources Committee to report back to the States by November 2026 with a second tranche of measures needed to tackle and the remaining structural deficit which may exist after the implementation of the measures set out above.
