Much ‘review’ about nothing?

Thursday 30 November 2017

Backbench politicians have raised concerns over whether the promise of ’reviews’ is being used by Ministers as a way of undermining their ideas, after the Treasury Minister proposed voting against several Budget 2018 ammendments so that the Council of Ministers could evaluate them.

Those fears came on day two of debate into how the States will spend taxpayers’ money and generate new revenue for the island next year.

On day one, Treasury Minister Senator Alan Maclean urged his fellow politicians to vote against three amendments brought by Senator Ozouf relating to slashing duty-free limits and whether gambling outlets and large liquor vendors should be taxed in order for his department to review them.

Then yesterday a number of States Members expressed fears that Ministers were ‘all review and no action’ as the Minister went on to suggest further reviews.

Pictured: States Members expressed concerns over the amount of reviews suggested by the Treasury Minister.

Reform Jersey Chairman Deputy Sam Mézec proposed changing the tax system in a way that they said would help ‘Middle Jersey’ by squeezing a little more out of Jersey’s higher earners. If adopted, the proposals would have generated an extra £6million in income for the States.

Numerous members of the States Assembly complimented the plans for being so well-researched and factually backed by Treasury data. Deputy Simon Bree - like others - said that he was shocked to find himself agreeing with a Reform Jersey principle, which he felt addressed the “growing trend of inequality in our society.”

“I was looking for the holes in it, I was looking for the errors, I was looking for the problems, I was reading it on the basis that, ‘Oh, it’s Reform Jersey policies… However, when you actually start reading it, when you start looking at it, and when you realise that the data has been provided by the Treasury Department themselves it works, it works very well,” he commented.

The Treasury Minister along with Senator Philip Ozouf called for a review to be undertaken to assess the impact of such a change. Senator Ozouf argued that the changes would cause the island’s top earners to leave, but Deputy Bree dared the Assembly to “make history” by addressing the “growing gap between the haves and have nots.”

Pictured: Although it wasn't passed, Deputy Sam Mézec's proposals were praised by many States Members.

He was met by a stomp of applause, as he asked: “How often have we heard from this Council of Ministers, ‘We’re doing a review?’”

His comments echoed those of Deputy Tracey Vallois, who commented: “It worries me that there appears to be a theme that comes out of treasury time and time again that is, ‘Don’t do this - let’s do a review.’”

Deputy Mézec’s idea was rejected 10 votes to 34, however.

Nonetheless, the threat of review also loomed over debate on the Constable of St Helier Simon Crowcroft’s proposal to get the States to pay rates on all public buildings by 2018. The Treasury Minister tried to bring an amendment to delay the date to 2018 so that a “sustainable funding mechanism” could be found in the interim for the rates, but members argued that islanders had waited long enough for the change, which first reared its head in the 70s. 

Ultimately, the Constable won his years-long fight, having secured 40 votes in his favour. He was bolstered by the support of his fellow Constables who had  previously rejected the idea, but had since come out in favour - lodging an amendment to take the amount payable by the States even further to £1.9million by also forcing them to pay the island-wide rate.

Pictured: Constable Simon Crowcroft was successful with his amendment to get the States to pay rates by 2018, which will affect buildings such as Cyril Le Marquand House, where the Taxes Office is located.

Yesterday’s debate also saw the Treasury Minister agree to look at the feasibility of taxing of applying GST to non-Jersey digital services suppliers, such as Spotify or Netflix (36 pour, 3 contre) and agree to try and encourage UK firms charging VAT on goods to Jersey to levy the correct sales tax. 

The day ended with a vote on yet another review - this time on whether the Co-op and Jersey Mutual should pay corporate tax (there will be review).

Senator Ozouf, who brought the proposal, explained that the new Retail Tax gave rise to a “really really tricky” situation. It is currently exempt from the new tax, as it effectively ‘trades with itself’ because it shares its dividends with its own customers - a state of play protected by ancient case law, but one that gives them a competitive advantage. However, the company have explained that the price of food could increase by as much as 5% if they are forced to pay the tax. 

The Senator nonetheless argued that it would solve an issue of unfairness if they were made to pay.

Deputy Andrew Lewis, however, did not share this view. He said that Jersey “should be welcoming that and protecting it.” He added that Coop members would not stand to benefit so much from ‘double divvy days’ and urged members to approach the idea “with extreme caution.” Deputy Bree agreed, later adding: “Let us reject this amendment and move on to more important matters.”

The review was adopted with 34 votes in favour. 

Today, in what is expected to be the final day of debate, States Members will vote on another review - Senator Ozouf’s proposed examination of the liquor industry by CICRA - before agreeing whether to agree the Budget 2018 in its entirety.