Raising Jersey's GST is a 'threat to recovery'

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Increasing Jersey's Goods and Services Tax (GST) from 3% to 5% could threaten economic recovery, a deputy has claimed.

Deputy Montfort Tadier has called for politicians and members of the public to oppose the rise, which is part of the 2011 budget proposals.

If agreed by the States, the increase would take place from 1 June 2011.

Islanders are charged GST on most items, including newspapers, food and petrol.

Start Quote

This will be one increase too far for the public of Jersey”

End Quote Deputy Montfort Tadier

Deputy Tadier said: "While the treasury proposals for GST were entirely predictable, the increase is not inevitable."

He said the plans would hit low and middle earners the most and threaten economic recovery at a time when retail sales were already badly hit.

"It will be interesting to see just to what extent the public and retailers have accepted GST and whether, in these times of widespread austerity, this will be one increase too far for the public of Jersey."

'Last straw'

The president of the Jersey Democratic Alliance, former Senator Ted Vibert, has also criticised the proposed GST rise, saying it could be the "last straw" for people on lower and middle incomes.

"So far, they have silently accepted the cuts in services and jobs but the fact that the rich on this island have escaped with comparatively little sacrifice has made them very upset," he commented.

Both Deputy Tadier and Mr Vibert suggested money from the island's "rainy day fund" could be used to cover part of the deficit.

Announcing the GST rise on Friday, the Treasury Minister, Senator Philip Ozouf, said although GST was controversial, it raised money in an efficient way that did minimal damage to the economy.

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