TREASURY & RESOURCES

Despite all the failures of previous generations, one would have at least hoped the economy would be under control. Were we not sold the idea of perpetual growth, endless riches and the greatest possible prosperity? Were we not told the gains would vastly outweigh the pains? And yet, after booms and busts and deepest recessions ever, the economy lies in tatters once again and once again it is the youngest, the oldest and the weakest who are disproportionately called upon to rebuild it from the rubble of other people’s mistakes.

To maintain almost impossible standards of living, debt increased year on year but was cunningly structured in such a way that our children and theirs will be burdened far beyond any benefit they may accrue. The socialisation of debt and the privatisation of eye watering profits, gouged from a populace held captive to the vested interests of crony capitalism, became a continent wide policy platform.

But one day, all the money ran out and those who made the mess begged to be rescued. Unemployment rose, and those who made the mess were not the ones to pay the price. A comfortable retirement for most is now a fantasy, many face working til 70 or beyond and the younger generation have been elbowed aside by cheap, immigrant labour.

We believe that it is the responsibility of Government to guard and shepherd the economy to the point where our children and theirs have the same opportunities to live, to learn, to play, to buy homes, and prosper as our parents and theirs enjoyed, free from the burden of other peoples’ debts.

Reducing the Burden of Taxation

We believe that as a matter of principle people are better placed to decide what their money should be spent on than Government. That said, we also believe that Government needs to raise enough money for the adequate functioning of essential State services.

We believe that reductions in 0/10 and other increases in revenue should result in a corresponding reduction of the tax burden for those individuals earning less than £100k.

Changes to the Scope of GST

Removing GST from:

  • Food

  • Educational Items

  • School Uniforms

  • Any Utilities

  • Essential items i.e. toiletries, nappies, baby milk etc.

Filling the Black Hole

We believe that any alterations to the 0/10 policy must be applied directly to filling the black hole.

We believe that the current medium term financial plan, the health charge and the sewage charge are regressive and punitive.

We believe that the legalisation of medicinal cannabis would, in addition to creating dozens of new jobs, many of them highly skilled, highly paid and sustainable, would also create an entirely new revenue stream as well as reduce the significant drug bill the States of Jersey Health Service pays annually.

The example of Colorado shows that in the first six months the industry generated $12.6 million in tax revenue and licence fees alone. Governor Hickenlooper estimated that sales in all marijuana stores would approach $1 billion for the 2014 fiscal year with between $40 and $50 million in tax and licence revenues.

Whilst we acknowledge the Colorado model is not a precise match for what we propose here in Jersey, nonetheless we believe it is indicative of the significant savings that can be made, employment created, industries and facilities regenerated, revenue raised and police time saved.

We believe that the recently announced Israeli model may serve as a blueprint for Jersey including:

  • Cannabis-based medications will be sold and distributed in pharmacies instead of by growers. Currently, the only other country with a similar model – albeit on a much smaller scale – is the Netherlands.

  • Physicians able to prescribe medical cannabis, as well as more staff to manage medical cannabis license issuance.

  • Standard physician prescriptions will be used for patients to acquire medical cannabis from a pharmacy.

  • Opening up the market of approved grow operations.

The Israeli Health Ministry outlines standard safety and quality parameters for all medical cannabis products. The Ministry of Finance has proposed that medical cannabis could be exported globally, with a potential market value of well over NIS 1 billion (c.£200m) annually.

There is absolutely no reason to think that a comparable operation here in Jersey would not produce comparable returns.

Property Tax

We do not believe in the creation of rafts of new taxes however, we believe that large scale property development and those from outside the Island who invest in property in Jersey for profit  should be subject to an additional one-off tax to deter profiteering at the expense of Jersey residents.

In addition, we believe that reductions to the social security budget through the use of personal insurance plans, reduction in the health budget through the use of private health insurance, and the reduction in the population as a consequence of applying a skills based immigration policy, would all produce significant savings and allow for the closure of the “black hole” without the need to raise GST or introduce any new taxes regardless of however cleverly they may be disguised.

0/10

Jersey’s 0/10 tax exempts all businesses except those in financial services from having to pay any corporation tax (0%), while leaving specified financial services companies to pay a low tax rate of 10%. The income generated from 0/10 is not equal to the revenue of the original tax system and this leaves Jersey with a budget deficit of several million pounds.

We believe that 0/10 has put an unacceptable strain on our finances, and should be urgently reviewed. Brought in at the demands of the OECD, and criticised in the past by the EU for not adhering to the ‘spirit’ of the Code of Conduct on Business Taxation 0/10 has been problematic from day one.

In 2009, then treasury Minister Phillip Ozouf attempted to justify 0/10 by claiming that; “Three years ago we made significant changes to our tax system to keep our island competitive and to maintain the high quality public services and way of life we are all used to.” Well, it hasn’t worked out that way, instead we have a £145 million pound “black hole” the Council of Ministers seem desperate to fill by any means possible, the largest round of public service cuts in living memory, job losses, new charges and taxes and increases to GST.

The definition of insanity, at least according to Albert Einstein is “doing the same thing over and over again and expecting a different result.”

We believe that Jersey should be deciding its own revenue raising measures, which include the right to tax our foreign corporations based here. Most of them are happy to pay the default £500 each year in local tax, just like they used to. Instead, under the current arrangements they don’t pay anything.