Budget aims have become questionable
Monday 19th November 2012, 3:00PM GMT.
THE crunching sound of reverse gear being engaged by Treasury and Resources could be heard this weekend as islanders reacted with fury to plans for the phased removal of mortgage interest tax relief.
Suddenly, it was never a proposal or a plan in the Budget, merely a summation of what Treasury’s five members collectively believe. Only after a review of taxes and duties might firm proposals come to the States.
Which begs a number of questions. For example, why announce plans for a phased eight-stage reduction of £50,000 per annum before a review which might alter that has been conducted?
How are households supposed to budget for something that may never happen? Is it good government to float political thought bubbles about an issue that has left many homeowners and first-time buyers in despair?
And is there any possibility of a fair review when those who have commissioned it have so clearly indicated beforehand what answer they want on the basis of principle?
That principle is centred on the notion that it is unfair for all taxpayers to fund a tax relief from which only a limited number benefit.
Yet that is how taxes often work. People without children fund education, the healthy subsidise the sick, people in work pay for those who are not.
And are people with mortgages really such a minority? Take away children, the retired, those in social housing (who get their own leg-up from the States) and those lucky enough to own their property outright and mortgage holders represent a core part of our society.
One final question: where will the £8m. go?
The Budget merely says it will be ‘redistributed’ and the T&R minister has blogged about perhaps raising allowances by 9%. Yet even that comes with the caveat that it is dependent on ‘the prevailing economic and fiscal conditions’.
Is there anyone who expects this economic gloom to lift any time soon?
With the States operating at a £31m. deficit for this year alone and major departments unable to stay on budget the temptation to pour this money into the black hole could prove overwhelming.