The meeting organised by the Jersey Rights Association was largely dominated by the eight politicians who had been invited to speak.Four spoke ‘for’ the principle of user pays charges, and four ‘against’.First to speak was Finance president Senator Terry Le Sueur , who outlined the financial problems ahead, including the need to cut public spending and the impact of a zero rate of corporate tax, which could cost the Island up to £100m.Increased revenues would have to be found, he said, and his committee were conscious of the need to protect those on very low incomes.But the Senator stressed the need to look at the big picture, rather than taking individual measures, such as user pays, out of context.
Future proposals included limiting mortgage interest tax relief, he said, which his committee had finalised at their meeting yesterday.
He did not reveal any further details.Environment and Public Services president Deputy Maurice Dubras, whose committee proposed the controversial sewerage tax, told the meeting that they were facing difficult budget choices.
‘Frankly we would rather not have to make such proposals but we are faced with a difficult choice.
Either maintain services or contemplate cutting them,’ he said.Employment and Social Security president Senator Paul Routier revealed that his committee had struggled with proposed cutbacks but had managed to find enough money to generally maintain existing benefit funds.Finance vice-president Senator Philip Ozouf said that he understood public concern about user pays charges, but that they were not all wrong.Citing increases in planning fees, he said: ‘User pays does have a role in making the right people pay for the services they receive.’ Health president Senator Stuart Syvret said that loopholes in the Island’s tax system had to be closed before the ordinary man on the street was targeted.’Jersey has foregone billions in tax revenue by providing loopholes for the rich to avoid tax,’ he said.Referring to the sewerage tax, he said: ‘How credible is saying we want to move forward on an equitable basis when the first people being hit are the ordinary working people, and loopholes continue to exist.’Home Affairs president Senator Wendy Kinnard said she was not totally against user pays but was opposed to proposals such as the sewerage charge.
It was a ‘stealth tax’, she said, which failed to take account of the ability to make a choice.Senator Ted Vibert said that the Jersey system of government was based on taking the easy way out and letting the taxpayer meet the cost.This was demonstrated by the size of the public service, he said.
‘There are more people working in the Agriculture and Fisheries Department than farming in this Island.
Tourism have more staff now than when they had 20,000 beds.
We now have 12,000.’Someone has to have the courage to take the sword and slash and burn,’ he said.User pays was another example of the States trying to take the easy way out, but he promised: ‘They are not going to get away with it.’Last to speak was Deputy Geoff Southern, who said that user pays charges were an example of regressive taxation, where the lower paid were hit the hardest.The only fair tax was income tax and they had to introduce a higher rate for those that were rich, he said.A wide range of issues were raised by the audience.Former Deputy Tom Jordan said the States were spending too much and that the ‘sacred cows’ of health, education and housing should be looked at.Senator Syvret said his committee had initiated a review of services but that modern society demanded ‘very significant’ expenditure on health services Robert Brown accused candidates in last autumn’s elections of failing to be honest about the state of the Island’s finances.
He said the £100m that would be lost because of a zero rate of corporate tax was the most worrying aspect but higher taxation to fill the hole was a ‘no go’ if the Island wanted a finance industry in the future.He called for greater openness, accountabilty and explanations from politicians.Senator Le Sueur said when he became Finance president he knew what he was ‘letting himself in for’ but hoped to bring the same prudence to the job that he had to Employment and Social Security.Roger Rabet asked why inheritance and capital gains taxes had not been considered and was told by Senator Kinnard that they would not sit well with the finance industry.
She said other taxes and the raising social security payments were better options and she called on Finance to provide more information.Pat Lucas spoke against the concept of finance centres allowing rich businesses and individuals to pay little tax while ordinary tax-payers paid more.
Senator Vibert replied, saying he had no moral problem with the finance industry and that it was clear that Jersey’s was run to the highest standard.Chris Whitworth sought views on a £6 minimum wage.
But Senator Routier refused to support any figure.
He said he was awaiting the research being carried out on the issue.Jeni Hampton asked whether former economic adviser John Christensen was owed an apology because his warnings about over-reliance upon finance were coming true.Senator Syvret said that in some respects he was right but that the Island had to accept the finance industry was ‘the only game in town’.What was remarkable, said the Senator, was that when any tax change was suggested which would hit the rich, there were always reasons why it could not be done.Transport union leader Nick Corbel asked for views on Housing’s proposals to cut rent rebates.
Deputy Southern replied: ‘This is the most direct attack on the poor and lower paid that I have seen in my time in Jersey.’ He called on the Housing president to write to every tenant to explain how it would affect them.There was just one question asked relating to the sewerage tax – a resident from a country parish asked whether people like him with septic tanks should be refunded for paying to have it pumped out.Deputy Dubras said the point of the proposed tax was to introduce equity and that there should be no refunds because the service had to be paid for.Robert Weston suggested a ‘third way’ of raising revenue by allowing the population to rise to enable more workers to contribute to the tax take.
Senator Le Sueur said that whatever solution was found, it had to be sustainable in the long term.
