States Spending Cuts Called For At Jersey Public Meeting

by Jason Gorringe, Tax-News.com, London

30 May 2002

According to a report in the Jersey Evening Post on Tuesday, States authorities came under fire for their spending at a meeting held this week to discuss possible tax reforms.

The meeting was one of two organised to allow the local business community to have their say on potential changes, and hear presentations from independent economic consultancy, Oxera, and the Finance and Economics Committee President, Senator Frank Walker. It was better attended than a recent meeting on the possibility of introducing a Value Added Tax to the Island, according to the JEP.

Speaking on Monday, Fod Barnes, Senior Adviser to Oxera said that although Jersey's fiscal position is reasonable, and the average States spend per resident similar to that of the UK, income taxes paid by individuals are lower in the Channel Island jurisdiction.

He added that Jersey's aging population, coupled with competition from other jurisdictions and pressure from the OECD, EU and other multilateral organisations is likely to mean that either spending must be reduced, or the Island's tax structure changed in the near future.

The Jersey Evening Post reported that the vast majority of those attending the meeting strongly supported the former proposition, arguing that States spending on civil servants is excessive, and can easily be streamlined.

'The States have a wage packet of £300 million a year - if you're running a business that's the first thing you look at,' one local businessman was quoted as observing, adding: 'Sort that out and then come back to the people who are earning the money and ask us for taxes.'

Concerns were also expressed regarding the impact of VAT introduction - even at the relatively low level of 1.5% suggested- on small businesses. According to the JEP, finance industry members attending the meeting also emphasised the toll that recent pressure from the international community has taken on the sector:

'There is a burden of compliance, but we do not know where we are going. We are implementing change after change,' an audience member was quoted as observing.

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