Welfare payments risk turning us into high-tax jurisdiction
Thursday 13th October 2011, 2:29PM BST.
RISING spending on social security is in danger of making Guernsey a high-tax jurisdiction, the States was told yesterday.
Chief Minister Lyndon Trott said that social security expenditure and growth had risen by 19% in real terms from 2007 to date.
Deputy Trott had asked economist Professor Geoffrey Wood (pictured), who compiled the fiscal policy review released on Monday, that if the growth was to continue, whether within a generation the cost of providing social security would double.
Deputy Trott said the professor agreed. He then asked whether if as a result of that, could Guernsey move from a low-tax jurisdiction to a high-tax one.
The professor said ‘yes, that is a real threat’, according to Deputy Trott.
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Well, well welfare payments are up 19% since 2007. Lyndon just whose policies do you blame for that then? On whose watch did personal tax allowences not rise? Who set the minimum wage below the poverty line? Who allowed unbridled immigration whilst not putting the housing infrastructure in leading to spiralling housing costs.
In essence WHO IS TO BLAME that for many islanders it is better to be in poverty on welfare than worse poverty in work!
Well Lyndon we’re waiting, who is responsible?
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And whose fault is it, if Deputy Trott knows the answer already, and by his rhetoric questions he appears to show that he does already knows the answers, why hasn’t he been doing something about it ?? I suspect he’s playing politics again !!
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Always a difficult balance to strike between tax and welfare. IMO Guernsey must not go down the increasing welfare and higher tax route and here’s why I think that (if anyone cares!). A higher tax and higher welfare bill provides a safety net in the event of fewer jobs. But what happens when there are more welfare payment than jobs – ask Greece. When welfare is limited because taxes need to stay low then business is confident to function and an business ethic stays king. When it’s easier to start a business than be on welfare then the balance is tipped in favour of those that want to work. If enough people are in employment then the genuinely needy – sick, disabled and severe hardship cases can be taken care of through tax revenue.
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This is no surprise as the cost of living in Guernsey is so high that more and more people are going to slip through the net because wages are stagnate while even the basics to survive are getting out of reach for an increasing number of people.
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The huge rise in youth on welfare is an obvious consequence of our poorly performing comprehensive schools. That is one area which needs addressing as a priority.
The needy need to be taken care of without their plight being tarnished by those who see being on welfare as a lifestyle choice.
If taxes rise then businesses will leave and the jobs they provide will go with them.
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I think the attitude around welfare payments needs to change.
On the whole I think its great that people in need have the help that they require. I was really pleased to read that the AA and ICA have been reviewed and improved.
However I think people are just relying on it in some occassions when they could be bettering their own lives instead of the states doing it for them. I think its supposed to be a safety net not a default position.
Open discussion about the use of it and life planning to avoid reliance on it is possibly the way forward. It seems socially acceptable to abuse it to an extent or people are acting without thinking of consequences and expecting the government to sort them out. I don’t this is ok.
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It’s quite obvious that the States is not going to allow Social Security spending to continue to rise in this way year on year. Keeping the taxes of this island low is, rightly or wrongly, the main philosophy of this Policy Council. There does need to be more incentive for people to get off benefits and go to work. There should be no circumstances whereby someone would actually be less well off if they move off welfare and get a job. Personal allowances should rise or some sort of tax credit should be brought in to ensure that work does pay. It would also be helpful if the minimum wage was tied to a certain percentage of median earnings. Work should be rewarded.Those who can work, should. Those who can’t work (for whatever reason) should have a safety net that is set at a decent level, but one that we can afford.
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rachel
your bandwagon is really rolling now!
so the less than 300 people (of all ages) unemployed and presumably on “welfare” as you put it are down to the high schools?
would you please expand on the data you have collected to back up your ill thought out comment
“the huge rise in youth on welfare”
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Whilst I agree that something should be done about the welfare culture we are breeding, I had to have a little snigger at LT attempting to make it out to be such an issue that we could eventually move to a higher rate of tax because of it.
Meanwhile….. over in Zero-10 headquarters…….
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Can’t find the exact article but I remember it being an area which was increasing as a percentage of the total. It’s logical to state that someone with little education would have less employment prospects than someone who does. Simple.
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The only way this island will ever dig itself out of its ever deepening black hole is to scrap the ill fated zero ten scheme and start charging a sensible rate of corporate tax.
We have to ask ourselves why we are so skint, we are supposed to be a leading finance centre and the States cannot get our own finances in order!
Sadly we have become far too reliant on finance,there are those that are doing very nicely out of it but a lot of others are struggling.
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