The government of New Caledonia will engage in broad consultation with the social partners to reform taxation while the finances of the archipelago are “on the brink”, he announced on Tuesday.
It is clear that we are on the edge of the abyss. Without the use of borrowing, we would not have been able to complete the 2022 budget, said Gilbert Tyuienon, member of the Caldonian government in charge of taxation.
Now we stop here talking to enter into the reforms concretely, with a precise method and timetable, he continued, at the end of the first meeting of a Tax Reform Monitoring Committee (CSRF).
Around the executive, this committee brings together employers’ organizations and employee unions with a view to building in consultation in 2022 a series of structural measures, which will then be examined by Congress (deliberative assembly). The territory has had fiscal autonomy for a long time.
The reforms relate in particular to the fight against tax evasion, the creation of a tax on capital gains on real estate and a mining extraction royalty (nickel) or even a revision of the scale of income tax .
New Caldonia lives beyond its means. There is a need to question its model and its short and long-term financing, recommended Mimsy Daly, president of Medef, arguing for a reduction in public spending.
Satisfied with the government’s approach, Milo Poaniewa, secretary general of Usoenc (trade union of workers and employees), for his part insisted on the need to have less impact on consumers and employees and to ensure better redistribution.
Faced with a constant erosion of its tax revenues and the significant deficits of its social schemes (220 million euros of cumulative debt), New Caledonia only managed to complete its 2022 budget thanks to the granting in February of a loan of 175 million euros, guaranteed by the State. The budget must be adopted at the end of March by local elected officials.
In 2020, the archipelago took out a first loan (240 million euros) to deal with the health crisis. Its debt ratio now stands at 162%, well above the alert threshold.