Falklands : Falklands - Public Meeting Report (24/02/09)
Submitted by Falkland Islands News Network (Juanita Brock) 27.02.2009 (Article Archived on 13.03.2009)
A public meeting was held in the Court and Council Chamber of the Town Hall beginning at 1700 hrs on Tuesday, 24 February 2009.
PUBLIC MEETING REPORT (090224)
By J. Brock (FINN)
A public meeting was held in the Court and Council Chamber of the Town Hall beginning at 1700 hrs on Tuesday, 24 February 2009. Present were Cllrs Clausen, Stevens, Cockwell, Summers, Robertson and Hansen. Also present were Sonny Jose (FIG’s Head of Policy and Economic Advisor) and Tim Thorogood, the Chief Executive.
At the meeting Sonny Jose gave a Power-point presentation about the Government Review and Fiscal Policy Green Paper. The focus was on decreasing expenditure and increasing revenue, though it is thought that most of the good housekeeping has been completed and that we were at the point of having to raise revenue not only by “user pays” but also by direct and indirect taxes. Mr Jose stressed that direct taxation thwarts business growth but that indirect taxes were better for all of us. The point was made that this is a consultation paper and views from the public are most welcome.
Our income from Illex is down to £6 Million from £10 Million last year. Revenue to cover this loss has to come from somewhere. Also mentioned was the fact that government spending was down 28% from what it spent in 2001.
Some interesting facts are that 2/3rds of individuals are making enough to pay tax and only 54 out of the 270 registered companies earn enough to pay taxes. Ideas about how this can be remedies also are needed.
At this point Phil Middleton wanted to know if there was essentially target figure that Government were looking for or was it £3 Million because that’s what the deficit is? Cllr Summers said that they would be addressed in a revised Medium Term Financial plan. Because of the reduction in Government revenues because of issues in the United States and Europe and elsewhere, we are short of a couple million in revenue that we might normally have expected, which makes the targets in the original medium term financial plan impossible to achieve. He went on to say that the Government is presenting a suite of options for both the potential for increasing revenue, the potential for reducing costs and trying to find the right balance. He went on to say that where we are with the budgeting process now is that we probably still need to find about £1.5 Million between income and expenditure. That wouldn’t give us a balanced budget but it would give us a deficit that was small enough to be manageable in the current circumstances. He also said that we needed 2.5 to 3% per annum in order to stay the same in real terms.
Roger Spink asked about the 9% increase in passenger tax from the 1st of July this year and indicated that this large increase might have the opposite affect. Cllr Clausen said the increase was a one-off and that there hadn’t been an increase in a number of years. Cllr Summers mentioned that tourism figures were slated to decrease next year due to the world-wide economic down turn and that the trend would continue for a number of years.
Roger Spink went onto say that there was a 9% increase in the cost of living in December alone and though there was an increase in the cost of fuel a large proportion of it was due to the increase in charges for services included in the last budget.
Cllr Summers said that it was self evident that there was an increase in the cost of buying things and that no one need apologise for an increase in the cost of living or to put up the charges to services. There were only two options open to us - either cut services or earn more revenue to pay for them.
A member of the public said that there was a large array of options missing from the Green paper and some of those that were listed were worthless in terms of what it costs to implement them.
Cllr Summers mentioned that Sonny had only put up potential options and this was an area where public input was needed. He went on to say that he didn’t believe in capital gains or inheritance taxes. As for inheritance taxes, prior to 1982 a lot of the country’s wealth went out of the country and there was not enough inherited wealth to implement a tax on it.
The same member of the public asked if there were tax leakage and Sonny Jose said there was but he didn’t have the figures with him. He also was unsure of any confidentiality that might be broken if he made the figures public. He didn’t even give a ball park figure.
The member of the public asked if it would “fill the hole” and Mike Summers said it would if this leakage was taxed. In terms of what Roger Spink had said earlier on you had to be aware of the reaction that would create. It would cause people not to come here or to demand higher wages. He said we had a reasonably clear idea about the gap between GNP and GBP.
Dave Roberts asked if sales tax would hurt less and be fairer. Cllr summers said though it hit everybody equally it wasn’t a good tax. He subsequently said the best way to tax goods was at the point of import.
Richard Cockwell said that changing the tax bands won’t help because it takes £15,000 per annum to have enough to get by and lowering the threshold would make it more difficult for lower income people.
At the end of the formal section questions were invited about the recording and subsequent broadcast of public meetings. Cllr Summers said it was a one-off experiment for now. Claudette Anderson was also working on a Legislative Assembly website that would be especially helpful when completed.
John Birmingham said that a concerned member of the public called him about low flying aircraft scaring the tourists. All present at the meeting felt those low flying aircraft were the sound of freedom and Falkland Islanders don’t want them to stop no matter how much they scare the tourists.
Willie Bowles asked if anyone would consider growing the vegetables that now is imported from Chile as there was plenty of land about. Cllr Summers said there was nothing wrong with the idea but it would take a lot of work and the person would have to realise a profit.
Cllr Cockwell said that you would have to approach FIDC to get any Government money to start that kind of a business up – some members of the public quietly disagreed. Ian Hansen thought it would be labour intensive.
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