AS the debate rages over whether the government has done well or badly concerning the spread of the virus, the issues that will affect Jersey after the pandemic has faded seem to have been rather overlooked or pushed into the long grass.
We still see grandiose plans concerning the Waterfront, the Hospital and shiny new government offices. We see government employment (and services) still growing, seemingly relatively unchecked.
However, beneath the surface we still have the same issues – migration, housing and an ageing population.
One now has to stand back and wonder not only where the plans for these are, but more importantly for individuals and businesses, how are we going to pay for all this?
The pandemic has been a drain on our resources. It has materiality affected taxable profits, especially in the hospitality sector. Government resources have been redeployed to deal with the pandemic so some projects that could produce taxable receipts seem to have been delayed. Cannabis seemed to be the preferred solution but still no firm details of the estimated revenues or how it will actually be taxed. An interesting conundrum as Jersey wishes to have a settled global identity.
Our finance industry portrays itself as being of the highest integrity while we wish to cultivate drugs that are still illegal in most of the world.
The move to introduce a minimum global tax rate for certain companies will not have a significant positive or detrimental effect on the Island. The finance industry continues to prosper in the face of intense global competition.
We are left in a position where the Island needs to fund its expenditure. One must hope that the easy option of personal tax hikes and social security rises are ignored.
The more, however, we take from the employee and employer the bigger the housing affordability gap. We must not drive future generations away. Nimbyism seems alive and well in relation to the amendments to the Island Plan and also tax policy.
The path will not be that easy or straightforward but one hopes that the government will come forward with openness, flexibility and imagination and accept that it does not know everything.
Unfortunately, as elections come into focus and we see a plethora of political parties spring up we are concerned that populist short-term policies will take preference over difficult long-term decisions.
As the pandemic continues and the restrictions remain in place, the black hole will simply grow and grow. The resources and energy of the young to fill the hole may have already left the Island (or be prepared to go) as they struggle with rising tax bills, the increased cost of living and the impossible housing market.
It’s time to look past the pandemic and visualise what the future will look like for all. Difficult decisions will be required, especially in relation to property and taxation (stamp duty on second homes, capital gains on second properties, increased probate charges, removal of certain reliefs, GST etc). The debate needs to be had now and in public and not when the position is critical.