Spending on hospitals, schools and airports could be cut, after Guernsey's States agreed to a partially unfunded 2025 Budget.

Deputies voted not to increase income tax by 2% for two years, as Policy and Resources had suggested to cover an expected £100m shortfall in funding.

But, despite previous attempts to introduce a goods and services tax failing, this time State members agreed 20-15 that GST should be worked on for 2027.

That could mean islanders paying an extra 5% on almost everything they buy.

Deputy Peter Roffey, who pushed for the so-called GST plus package, gave Island FM his reaction:

"Those on modest and middle incomes will be slightly better off (than had the income tax rise been agreed, and when combined with reforms to social security).  Those on higher incomes will be paying more, but you can't raise extra revenue to provide public services to a changing demographic without somebody paying more.

"I am pleased that it will be the people that are best able to do that that will be bearing that burden."

He's described GST as a 'long-term' decision, adding that P&R will need to present a revenue raising idea that will cover the next couple of years before a system for a consumption tax is introduced.

What was striking was how little support there was for increasing income tax. P&R are going to have to regard that one as dead in the water."

P&R President Lyndon Trott has warned the partially unfunded £650m budget will have consequences, and has put capital projects in jeopardy.

He says his committee has been left to 'pick up the pieces'.

Meanwhile, long-time opponent of GST Deputy Carl Meerveld says Guernsey's general election, in June 2025, has essentially become a single-issue election. 

He believes that is bad for democracy:

"We'll end up focusing on a single issue, and deputies are potentially elected, or not elected, depending on their views on that topic, and we don't have the opportunity to discuss the broader range of issues our island faces and therefore (give) the electorate a more balanced view of the suitability of candidates.

I think the next election will effectively turn into a referendum on GST and my feeling is that the overwhelming majority of the electorate do not want to see GST introduced, and therefore it will be thrown out.

I don't think there is a cat in hell's chance that GST will be introduced."