REMOVING GST from food would ‘leave a hole’ in the Island’s budgets and would not be delivered quickly enough to help Islanders with the current cost-of-living crisis, the Treasury Minister has warned.
Deputy Ian Gorst said that expected government income – including from GST receipts – had been taken into account when formulating the recent Government Plan proposals and that the money would be used to make ‘crucial investment’ in areas such as health, education and children’s services.
Reform Jersey Deputy Raluca Kovacs has lodged a proposition calling for the 5% tax to be axed from food.
The move has received support from one of the Island’s leading retailers, the Co-op. If the proposal is approved when it is debated by the States Assembly next month, the changes would come into effect by January 2024.
Deputy Gorst, responding to the proposition, said: ‘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.
‘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.’
GST was introduced in 2008 at a rate of 3% before going up to 5% in 2011, the level at which it has remained.
Deputy Gorst added: ‘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.’
