Full cost of airport work ‘should not be passed to users’
Wednesday 22nd July 2009, 2:29PM BST.
PASSENGERS and airlines should not pay the full cost of airport runway repairs, according to consultants York Aviation.
The States faces a bill of around £80m. to bring the runway up to scratch, but the Policy Council’s consultant said forcing airport users to cover that would damage the island’s economy.
‘If these costs were fully passed on to users of the airport through increased airport charges or direct charges to passengers, in our view such an increase in the cost of using the airport would lead to a reduction in demand and the range of air services available,’ said its report.
‘This would have a damaging effect on the island’s economy more generally because of the impact on the tourism industry and because of the effect of reductions in the range and frequency of air services impacting on the attractiveness of the island as a business location.’
When the States rejected Treasury’s borrowing plans to help fund projects such as the airport runway, part of the proposal members accepted was to generate more money from the airport.
One option was increasing air passenger duty by £1.95 on a single ticket. York Aviation said the impact of such an increase could be managed, but risked damaging the island.
‘Increases in charges above these levels would, in our view, give rise to substantial damage to the economy of Guernsey as a whole.’
The consultant said there was a case for some level of funding for the runway repairs to come from the States – in effect, the taxpayer.
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Well Nick Mann
It seems as if you wish to make it a sort of hobson’s choice.
If the users have to pay; then fares etc will rise.
If the States have to pay then taxes will rise.
‘What chance does the ordinary man-in-the-street
With that philosophy?
The firms who use Guernsey as a tax haven are thew ones who should fork out. Like scrooge and like squirrels they store it away.
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Eric
Sadly Guernsey has been overtaken by the “we want it and you pay culture”.
We being finance and you being the taxpayer.
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If its the case that our passenger figures will fall if airport taxes were to rise, then surely the opposite is the case as well. Why not reduce or abolish landing taxes so that passenger numbers rise, so that the whole Guernsey economy benefits ? Why do we insist on isolating airport revenues from the “Guernsey PLC” revenue pool ? Does it matter how we raise the revenue as long as the revenue is actually raised ?
More passengers equals more spending in our shops and restaurants, equals more tourist-related jobs and more tourist-related tax revenue and more diversification of our economy, and more viable air routes.
Of course, a GST would enable those extra visitors to help pay some of our tax burden including the cost of the airport.
I can’t help feeling that a GST suddenly becomes more palatable to its detractors if the proceeds could be ringfenced and specifically applied to pay for vital infrastucture-related projects from which a large proportion of the island benefits.
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