 A 5% goods and services tax is being proposed |
The Jersey States' new economic adviser claims a goods and services tax on the island would only push up inflation if wages rose as well. Dougie Peedle does not believe the tax on its own will have any long term inflationary effect the economy.
The Finance and Economics Committee wants to introduce a 5% goods and services tax to plug a hole in States finances as corporation tax falls.
One of the arguments against it is a higher cost of living.
But the recently appointed States economic adviser, Dougie Peedle, does not think that will happen unless wages rise in parallel. He said: "The tax rises actually fall out of any annual comparison of inflation over the course of 12 months.
"So it becomes a bit of a mirage that inflation is increasing.
"Actually if people push for wage increases then all that means is that prices go up further and nobody is getting any better off."
If the tax is introduced Mr Peedle is calling for a break in the traditional link between prices and wages.
One-Minute World News 
News services
E-mail this to a friend 
Printable version 
If people push for wage increases then all that means is that prices go up further. 
