Removing food GST "would leave a hole in balanced budgets"

Thursday 13 October 2022

Removing GST from food would "leave a hole" in "balanced budgets", the Treasury Minister has said in response to a Reform Deputy's bid to scrap the controversial tax.

Deputy Ian Gorst said that, in any case, he didn't think that Deputy Raluca Kovacs' plan could be delivered quickly enough to help islanders through the current cost of living crisis.

Deputy Kovacs will be presenting her proposition to the States Assembly next month, asking States Members to vote in favour of making the Treasury Minister bring forward proposals to have GST removed from food products by 2024.

Explaining her rationale behind her bid earlier this week, the St. Saviour Deputy said: "I know that the States of Jersey have discussed and debated removing GST on certain items before, with some very close voting, however, I believe the current economic and inflationary climate requires the removal of 5% now to assist many people in our community who are struggling to make ends meet."

Pictured: Reform Jersey's Deputy Raluca Kovacs, who will be getting States Members to vote on her plan next month.

Deputy Gorst responded this afternoon: "We are aware of the proposal lodged by Deputy Kovacs. The Council of Ministers will consider it carefully and fully ahead of the scheduled debate. Through the Mini-Budget, Ministers delivered, with the Assembly's support, a comprehensive package of measures that will help Islanders immediately with the cost of living crisis and be funded from improved income forecasts.

"Those forecasts have enabled crucial investment in services to be made, particularly in health, children's services and education."

He continued: "We have already said that, in the event that the cost of living continues to rise, Ministers will not hesitate to take measures to help islanders again, with further measures to put money in their hands, when they need it. There will be many arguments made for and against the proposal, but what is undeniable is that it cannot be delivered quickly enough to help Islanders with the challenges they may face today.

"Affordable and sustainable spending plans and helping Islanders with the cost of living are based upon current and improved forecasts of income, including GST receipts. These balanced budgets have been presented in the Government Plan. This proposal would leave a hole in those balanced budgets. It is disappointing that it has not been set in the context of those plans and how we propose to return the finances back to balance."

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