Armstrong on Labour and GST

March 6th, 2010 at 11:43 am by David Farrar

John Armstrong writes:

Axe the tax? would if it could. But it can’t. So maybe the tax will stay. Maybe it won’t. Who knows.

Labour isn’t saying. And it won’t be saying for quite a while yet. …

National’s overall tax package will leave Labour nursing a big political headache – how to make up the $2 billion shortfall in revenue if Labour pledges to restore the rate of back to 12.5 per cent.

Labour won’t say how. But it can hardly talk of raising income tax rates which National will have just lowered.

No party – not least one coming from such a long way behind its rival – can afford to saddle itself with that kind of platform.

I would welcome Labour giving New Zealanders a clear choice, and campaigning on increasing personal income tax rates.

But that is one thing Labour will definitely not be doing. It is not going to be trapped into declaring a position which it might later regret.

Goff has been around long enough to remember National’s very own GST-induced political disaster.

When Labour introduced GST in 1986, National felt obliged to come up with an alternative – the long-forgotten “Extax”.

With Labour determining no items would be exempted from GST, National saw a gap in the political market. Extax allowed exemptions for basic foods, doctors’ fees, local authority rates and some charities. The tax was universally panned as an administrative nightmare.

The ridicule prompted senior National MPs to lose faith in the policy, resulting in mixed messages as to where National really stood on a broad-based consumption tax.

Not just National MPs. I was an office holder in National in 1987 and I actually voted for the Labour Party, partly because of National’s ridicolous Extax policy.

Meanwhile Bryce Edwards looks at the Axe the Tax campaign. He looks at whether or not is is electioneering regardless of the rules devised by MPs on what is legal:

The Labour Party obviously hasn’t learned much from the severe public ignomany suffered when it was revealed that the party had been paying for its electioneering Pledge Card with public funds while in government. Their latest rort – running a heavily branded bus campaign around the country – is no less electioneering, yet Labour has once again used taxpayer funds to pay for this political advertising. This blog post looks at whether such electioneering can really be called ‘legitimate’, even if the exercise is made to fit into the dodgy Parliamentary Service rules. Regardless of the expenditure’s legal status, few voters will appreciate having to pay for such overt political advertising.

Bryce goes on to distinguish between whether something is “legal” and “legitimate”

10 Responses to “Armstrong on Labour and GST”

  1. Michaels (1,258 comments) says:

    Nice post…… BUT……
    YOU VOTED LABOUR?????????? FFS!!!

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  2. petal (707 comments) says:

    I voted for Labour in 1987. Best National Government we ever had.
    Just like a lot of people voted for National a few years ago to the the best Labour Government they will ever have


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  3. tvb (5,510 comments) says:

    How bout – “save the taxpayer thousands – axe the tax bus.”

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  4. 3-coil (1,320 comments) says:

    Labour’s policy here could not be clearer:

    Their “Axe the Tax” campaign unambiguously states that the Labour Party intends to scrap GST.

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  5. Redbaiter (12,012 comments) says:

    Deck chairs on the “Socialist Titanic”.

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  6. jaba (2,181 comments) says:

    my 1st ever vote (around the mid 70’s I guess) was for Labour and I did so up to the 2002?? election ( party votes went to the likes of M@#%$#@### Serious Party and fk me, even the Alliance once .. must have been the booze).
    I suggest Phil gets the sausage sizzles going to pay back the $30,000 plus now.

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  7. jaba (2,181 comments) says:

    regarding the GST increase .. the Nats have sort of gazumped Labour here. Labour will not reduce GST back to 12.5% or increase taxes on the rich pricks for the same reason why the Nats are stuffed on the Working for Families scam .. political suicide to cancel or seriously reduce WFF because Labour have made so many “ordinary” (their words, not mine) New Zealanders beneficiaries that, who would vote for an income reduction?

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  8. John Boscawen (133 comments) says:

    What John Armstrong did not comment on is the absolute hyprocrisy of Phil Goff campaigning against a proposed rise of 2.5% in GST.

    If Phil Goff wants to axe any tax he should be campaigning for the axing of the 5% ETS tax on electricity and petrol which starts on July 1st this year, ( and as a consequence will flow through the economic chain contribtuing to rises in all prices).

    Why isn’t he campaiging to axe the ETS Tax?

    Unlike the GST proposal where John Key and Bill English have made it abundantly clear that those on benefits and low incomes will be immediately compensated there will be NO compensating tax reductions for the increases in electricity, power and food that will will flow from the ETS. ( although benefits and only benefits will eventually be adjusted by the annual CPI adjustment).

    Perhaps the reason why Phil is not campaigning to axe the ETS Tax, is that if he had his way we would have had Labour’s ETS Tax operating from 1 January this year, and electricity would already have risen by 10%.

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  9. jaba (2,181 comments) says:

    John .. are you trying to 2nd guess Phil Goff .. good luck

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  10. Manolo (21,952 comments) says:

    “Why isn’t he campaiging to axe the ETS Tax?”

    John Boscawen, why isn’t ACT campaigning much, much harder (and making its voice heard) against the ETS? Enough of political posturing and time for action to show empty-suit Key how damaging this absurd bill is to the NZ economy.

    Shouldn’t ACT be more vocal on the matter? Where is Rodney Hide and your own whole caucus when needed?

    We’re about to be hit by more taxes for what? The spineless National Party is letting the mad priest Nick Smith to lead all this nonsense. Where is ACT and what is its stance on the matter?

    I look forward to your reply.

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