Tax hike threat if Health spending keeps on rising
Friday 28th May 2010, 2:30PM BST.
INCOME TAX will have to rise if Health and Social Services spending continues to grow unchecked, the Treasury minister has said.
Expenditure by HSSD would double within 10 years if spending continued to rise at the current rate, but Deputy Charles Parkinson said T&R was working with the department to make sure that did not happen.
States accounts for 2009 revealed that HSSD spent an extra £13m. in 2009 compared with 2008, a rise of 14% in real terms. Deputy Parkinson (pictured) said if that carried on, islanders would have to pay more tax.
‘In the long run, income tax receipts tend to grow in real terms in line with economic growth. Assuming an average growth rate of 3%, then the personal rate of income tax would have to rise by 2p in the pound to cover this increase in expenditure, assuming no other taxes were increased or expenses reduced.’
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I know I will be strung up my my balls for saying this, but in principle I don’t think a small increase is unreasonable. A significant proportion of Guernsey residents demand world-class public services and low taxation. Unfortunately these two rarely coexist as world class services require world class investment.
I do have concerns though and increasing tax should be a last resort – not an excuse for poor management and frivolous spending. Before any increase is implemented there should be greater transparency and a thorough independent review of public spending to ensure all possible wastage is eliminated. Perhaps some successful local business leaders could assist here, as it’s in their interests to keep taxation low.
Measures should also be introduced to ensure low income earners aren’t unfairly penalised. This could either be in the form of a higher personal allowance or perhaps a tiered system where the increase only applies to earnings above a certain level.
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Guernsey’s revenue shortage is caused by our unsustainable zero-ten tax policy.Scrap that and we will be able to keep our first class health service.
Whilst on the subject of taxes,we should also withdraw the tax cap for the wealthy,they should pay tax on all their income,the same as any ordinary working person in Guernsey.After all,they can certainly afford it!
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I’m truly flabbergasted that on its third day of visibility an article about possible income tax rises only has one (+ this one) comment from yours truly!
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Come on Paul, get real.
This island, introduce a fair and workable tax system?
Never going to happen, so why talk about it.
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It is now high time we started working with Jersey so that costs across all sectors can be as competitive as possible. Talk is cheap. Action is what is needed here.
This independence is ignorant & wasting good money needlessly. I am sure real savings of between 20 to 30% could be found if we could work as one.
When one looks at the number of specialists, & other experts in certain fields on such a small island, it is hardly surprising costs are spiralling out of control.
We have a states sponsored airline. About time this was put to good use when services were needed between the islands.
All of the channel islands need to think more like a co-operative in times like these. Simple solutions are out there. Our current states members will only envisage further problems & highlight these as reasons not to get involved regardless of the obvious instant benefits.
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Paul, your proposal certainly shouldn’t be dismissed simply on petty parochial grounds.
If this was agreed in principle, in what areas do you think we could see savings?
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Nobody is going to find a rise in tax rates acceptable until and unless its clear that all public sector wastage has been eliminated. We seem to be a very long way away from that point.
Jersey is in the same boat. Savings for both islands can be achieved by working together in appropriate areas. Where there’s a will there’s a way. If major businesses can outsource administrative functions to India, then I’m sure that Guernsey and Jersey can outsource some administrative functions to each other, making optimum use of computer systems, and leaving just a “front office” in the other island for dealing with queries. This could easily save tens of millions of pounds per annum for each island and negate the need for tax arises.
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Paul Le Page
Economies of scale. Larger purchasing power & bigger discounts. More efficient usage of specialists. Share them amongst the islands & avoid unnecessary downtime & avoidable wastage.
Shared pool of expensive equipment. GY purchases some, whilst JY purchases separate with little or no duplication that although might well be crucial & needed, is not used all of the time on either island.
Condor serve both islands with single vessels. I am sure both health services could be a lot more economical if the desire was within.
I am no health expert. That’s for sure. I do know it is an area that increases massively year on year. We are living much longer & it will keep rising. There is a lot of greed throughout the whole system.
Prescription Medicine is an area where prices are charged according to where they are destined by the drug companies.
The islands are minutes away from each other. A short taxi ride in comparison with other parts of the world. We do not need to be self contained or independent of each other. Not when tens of millions can be saved each way.
Anything & everything that is underutilised needs to be maximised. I would go as far as suggesting a chain so that a consortium of end users can hold the medical supply companies to ransom rather than the other way round.
Drugs need to be available, just in time, when they are needed so that peer pressure panic purchases are avoided. Many millions are wasted here every year just in case the worst might happen. The onus needs to be placed onto the suppliers.
The scope is endless. It just needs a can do attitude & better relations between all, for the benefit of all.
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In order
Cut wastage, and prove it.
Lose zero-10.
Remove tax cap for high earners.
then and only then should a tax rise be considered, but the above steps would give us more than enough.
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I do love it when people who admit they are “no health expert” still see fit to pontificate on how easy it would be to save “tens of millions”.
It’s pretty much in the same league as all the armchair England managers who know so much better than the real manager how to run a national football team.
If you think you’d be so much better at saving all that money than every HSSD manager, all the board members, and every deputy on this island, then go ahead, go do the job. Stand for election, or apply for the chief officer post when it’s advertised.
Or perhaps it might be worth sitting back and considering a little, and realising that if it were that easy to save so much money, then someone else who was a health expert would already have thought how to do it.
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