Editorials on Labour’s GST exemption

September 29th, 2010 at 2:00 pm by David Farrar

The is unimpressed:

’s promise to remove from fresh fruit and vegetables reeks of desperation.

With his party languishing at 32 per cent in the latest Colmar Brunton poll – a formidable 22 points behind National – Labour leader Phil Goff’s desire for a circuit breaker is entirely understandable. However, that does not make his choice any less wrong-headed.

And the inconsistencies:

Mr Goff and his senior colleagues are experienced enough to know that to open the door for exemptions is to also open a can of worms.

They will be asked why those who buy their peas fresh should be favoured over those who buy them frozen – there is little, if any, difference in the health benefits they deliver.

They will be asked why the exemption should apply only to fruit and vegetables, and not to other elements of a healthy diet, such as fish and lean meat.

They will be asked why they do not provide for other exemptions to promote other activities that benefit society – removing GST from bicycles or solar panels, for example.

Most of all, they must pledge to also remove GST from condoms. Does Labour not care about herpes? Are they unconcerned over AIDs? Do they want to be responsible for tens of thousands of abortions, because they have not removed GST off condoms?

And The Press:

After spending more than two decades assiduously defending the integrity of the GST system it originally introduced, Labour has back-pedalled with its promise to scrap the tax on fresh fruit and vegetables. …

Despite Labour claims to the contrary, retailers have rightly warned that making fresh fruit and vegetables exempt would still compromise the simplicity of the system, which was one of its greatest virtues. This will inevitably lead to added compliance costs for many businesses and, in terms of monitoring or administering the GST change, for the government as well.

The benefit accruing to families, which Labour puts at $6 a week and National at just $1 a week, must be offset against the hidden compliance costs and the lost tax revenue of around $250 million a year. …

Rather than increase the costs to retailers, the Government focus, especially in post-quake Canterbury where employment losses are likely, should be on providing an economic environment which fosters job and income growth. This is a preferable way to ensure that fruit, vegetables and other healthy foods are affordable.

Exactly.

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52 Responses to “Editorials on Labour’s GST exemption”

  1. Fletch (6,256 comments) says:

    I know there will never be a good time and many reasons not to, but couldn’t the Govt have postponed the GST rise for 6 months or so until the Canterbury mess had been cleaned up?

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  2. Murray (8,844 comments) says:

    If they cared that much they’d give away seeds and gardening books.

    They don’t care though, they are desperate for votes and this looks like a winner. Anyone ask mickey cullen what he thinks because he was pretty down on the idea last time they looked at it.

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  3. krazykiwi (9,186 comments) says:

    I’m not sure which is worse: That we have politicians so divorced from reality that they promote this stupidity, or that we have large numbers of unthinking NZers who may switch their vote because of it.

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  4. jaba (2,120 comments) says:

    even their own downloaded on poor old Stewy Nash on redablurt about it .. where is Trev to protect the poor schmuck?

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  5. emmess (1,422 comments) says:

    I have heard socialists often argue that corporate tax cuts just get pocketed by corporations and not passed on to consumers, or on the flip side that tax increases they implement just get absorbed by corporations.
    So why do they not think that a cut in GST on fresh fruit and vegetables would be pocketed by the supermarkets?

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  6. davidp (3,576 comments) says:

    Most babies I know seem to be spoon fed a substance that looks like vomit by their parents. This baby food goo is typically tinned. So I won’t be paying GST on my imported bananas and guava and my freshly squeezed orange juice (none of that juice in a plastic container for me, especially since it’ll be taxed)… BUT PHIL GOFF WILL BE TAXING BABIES!!!

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  7. PeterG (21 comments) says:

    Along with all this, the reduction in GST would likely have a minimal impact on vege prices. The supermarkets already charge what they think the market will pay, for vegetables. If GST is cut then they will still charge much the same but pocket the difference.
    Also the vege grower currently gets to claim back GST on all of his costs, if his end product doesn’t attract GST then presumably he would have to pay GST on his petrol, fertilizer etc.
    Then there are the truck drivers, currently they can claim back all thier costs against GST. But what if a delivery truck has 20% vegetables and 80% meat. Do they get back 80% of the GST? How do they keep track?

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  8. JiveKitty (777 comments) says:

    @Murray: That presupposes that the people they gave books and seeds to would have the ability to read. More seriously, it supposes that people would get off their arses and put in the effort. I’m not so sure about that one, despite it being “hard times”.

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  9. krazykiwi (9,186 comments) says:

    BUT PHIL GOFF WILL BE TAXING BABIES!!!

    Lol. But hey, it’s a more honest response from a politician than kissing them!

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  10. Pete George (23,434 comments) says:

    More seriously, it supposes that people would get off their arses and put in the effort.

    KFC in New Plymouth showed how that can be done. Close all gardens for three months, and when they reopen everyone will flock to them.

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  11. Murray (8,844 comments) says:

    Jive I am shocked that have such a low opinion of Labour party voters… are you on their policy board or something?

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  12. tknorriss (327 comments) says:

    National could make a naked grab for the left leaning voters by promising to take GST off KFC. :smile:

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  13. Grant Michael McKenna (1,158 comments) says:

    Commentators- including, I regret to say, DPF, have missed the point. Goff is stating that he will have an interventionist government which will create policies requiring an increase in the number of bureaucrats to administer the interventions. The interventionism isn’t new, but explicitly stating that job creation in the public sector is of greater importance than economic efficiency is new.

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  14. the bird is the word (67 comments) says:

    Brilliant tknorriss :)

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  15. Chuck Bird (4,835 comments) says:

    Most of all, they must pledge to also remove GST from condoms. Does Labour not care about herpes? Are they unconcerned over AIDs? Do they want to be responsible for tens of thousands of abortions, because they have not removed GST off condoms?

    Condoms are very unreliable for the prevention pregnancies and STDs including HIV. Marriage is a far more reliable way of preventing unwanted pregnancies and the spread of HIV and other STDs. Can anyone show me a case of a man being infected with HV in New Zealand from his wife not counting refuges from high prevalence countries?

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  16. Pete George (23,434 comments) says:

    Are you suggesting marriage should be GST exempt? If you’re married you don’t pay GST? I could imagine that might benefit clothes sales more than fruit and vegetables.

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  17. Chuck Bird (4,835 comments) says:

    “Are you suggesting marriage should be GST exempt?”

    Not exactly, but I beleive that marriage should be promoted by the State in stead of being undermined as it has been for about the last 4 o 5 decades.

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  18. Tom Gould (141 comments) says:

    Had these ‘editorials’ carried a by-line, like grown up newspapers, it would be possible to take them seriously. These are most likely written by the same anti-Labour toady.

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  19. bhudson (4,736 comments) says:

    Tom,

    As opposed to a Labour toady – in which case they would have fully endorsed the proposal as ‘world changing’ and you would have accepted it as gospel?

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  20. Pete George (23,434 comments) says:

    Ok Chuck, more seriously, how can marriage be promoted/encouraged? Most encouragement these days seems to be in the way monetary bribes – you’d have to minimise marriage as a means of “arranging one’s financial affairs”.

    Much of the criticism seems to be directed at unmarried mothers – you can’t make them marry prats.

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  21. Redbaiter (13,197 comments) says:

    “These are most likely written by the same anti-Labour toady.”

    Disagreements over what is the best socialist policy does not make them anti-Labour. In general, the political alignment of NZ newspaper editors is pretty much in the leftist/ Progressive camp. You’re an extreme leftist so your view is skewed.

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  22. Pete George (23,434 comments) says:

    You’re an extreme leftist so your view is skewed.

    You’re a what? So your view is what?

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  23. Redbaiter (13,197 comments) says:

    Let’s ban the question mark and get rid of this prevaricating equivocating coward.

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  24. Guy Fawkes (702 comments) says:

    Take Laslos Hierachical needs table. Surely water, bottled or not should be exempt from GST before any food? And clean burning fuel like coke, charcoal, briquettes of re-cylcled waste. It can’t be right to have the State profit from essential fuels.

    What about GST on vehicle fuel in use by Emergency services or volunteer groups. Same for RUC Charges.

    I am offended by GST on tourist purchases, and all Tourism orientated goods and services should now really be exempt.

    Does Aussie imported apples have the same GST proposal? That would be very weird indeed.

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  25. Pete George (23,434 comments) says:

    Ok. I’ll say the obvious a different way. You’re an extreme rightist and your view is screwed.

    On Labour’s GST proposal the alignment of NZ newspaper editors is pretty much in the “what the hell are they thinking about” camp. Some people ignore that because it doesn’t suit their propaganda and instead try and turn it into a repeat slogan. Let’s ban the slogan.

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  26. Repton (769 comments) says:

    Marriage is a far more reliable way of preventing unwanted pregnancies

    Heh :-)

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  27. Redbaiter (13,197 comments) says:

    “You’re an extreme rightist”

    So you allege, but if I ever bothered asking you for proof, you’d fold exactly the way you always do.

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  28. Right of way is Way of Right (1,121 comments) says:

    So, after years and years of saying no, it’s now an option?

    I beleive that’s called a Flip-flop Mr Goff!

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  29. Gerrit (107 comments) says:

    Guy Fawkes

    You mean this Maslow?

    http://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs

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  30. Pete George (23,434 comments) says:

    I believe that’s called a Flip-flop Mr Goff!

    Maybe on the GST exemption you can drop the Flip.

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  31. Lucia Maria (2,281 comments) says:

    Much of the criticism seems to be directed at unmarried mothers – you can’t make them marry prats.

    Yet they’ve had sex with those same prats.

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  32. Redbaiter (13,197 comments) says:

    Single mothers are fucking this country in more ways than one.

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  33. lastmanstanding (1,279 comments) says:

    Strike a light mention of Maslow took me back 40 years to the good ole days at AK Oh the smell of sweet substances the unbraed unpantied muslin dress wearing beauties desporting themselves before we young men.

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  34. Lucia Maria (2,281 comments) says:

    It takes two to make babies, though, Redbaiter. If all women held out until marriage, I’d guess at least half of Kiwiblog readers would be outraged.

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  35. Pete George (23,434 comments) says:

    If all women held out until marriage

    Trouble is, unlike fruit and veg, it ain’t natural. I doubt taking GST off bananas and cucumbers would help much.

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  36. krazykiwi (9,186 comments) says:

    Pete asks:

    how can marriage be promoted/encouraged

    I guess a good start could be not discouraging it. This from 2008:

    Penalty Tax For Being Married As High As $15,000
    A married couple both working and on low incomes, or a family with a full-time parent are being penalised by up to $15,000 in their household income compared with a couple who separates or divorces. Low income families are being hardest hit by NZ’s ‘marriage penalty tax’ and poverty trap.

    Following today’s release of a report estimating the price of family breakdown and decreasing marriage rates to be costing the taxpayer at least $1 billion per year and $8 billion over the past decade, Family First has released calculations obtained from the NZ Institute of Economic Research (NZIER) showing that under current tax schemes, married couples from low income families would be up to $15,000 better off in terms of income in the hand if they separated.

    Moreover, if there are long-term economic and social benefits from stable, loving, biological families then perhaps some of the $1b ‘saving’ could be used to incentivize that stability.

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  37. Redbaiter (13,197 comments) says:

    Ann Coulter-

    “I think the biggest mistake liberals ever made was the cockamamie idea that somehow or another a woman could raise her children just as well as a woman and a man.”

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  38. krazykiwi (9,186 comments) says:

    @Right of way is Way of Right – I noted the use of the nice, polite term “back pedal” by The Press. If Key had been promoting this then they would have screamed KEY FLIP-FLOPS in large font the front page… probably several days running.

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  39. RRM (9,784 comments) says:

    Most of all, they must pledge to also remove GST from condoms. Does Labour not care about herpes? Are they unconcerned over AIDs? Do they want to be responsible for tens of thousands of abortions, because they have not removed GST off condoms?

    LOL, correct. What Labour needs is a massive defeat in 2011, and for heads to roll after that.

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  40. Gwilly (158 comments) says:

    @Redbaiter – love the quote from Ann Coulter. The American Left wet themselves each time she speaks.

    Amazing that our left-leaning media has come out so against this proposal. Is there hope?

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  41. RRM (9,784 comments) says:

    Single mothers are fucking this country in more ways than one.

    Yep, you’re onto it Baiter. And what’s more they do it specifically in order to fuck the country over. Don’t believe all of those phony excuses about “fleeing from partners that become abusive” etc etc.

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  42. CharlieBrown (994 comments) says:

    Unfortunately, John Key and his current national mps have crowded labour out of the center to center-left space. So labour have two options, move to the center, or out-left national. Unfortunately, their new crop of really dumb policies prove that they decided being fully left wing is the space they are going to move to. Its just a shame that Rodney Hide has killed of all of ACT’s credibility, meaning that there is no party able to fullfill the gaping hole left in the center right.

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  43. Guy Fawkes (702 comments) says:

    “Yep, you’re onto it Baiter. And what’s more they do it specifically in order to fuck the country over. Don’t believe all of those phony excuses about “fleeing from partners that become abusive” etc etc.”

    Yep they are setting up their fully funded, can’t be arsed, lets go shopping in our nightwear lifestyle. Boyfriends a plenty, and not much fresh groceries in their baskets. No room left after the RTD mixers. Bitch Piss for the masses of lazy young trouts.

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  44. Steve (4,544 comments) says:

    Single mothers are fucking this country in more ways than one.

    Yes, and so are their daughters and sons. It is a lifestyle they choose because we allow it. They are born into welfare lifestyles because they have never needed to earn or work.

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  45. Gavfaemonty (61 comments) says:

    All great news for my brother. He charges a little over $4,000 a day in Edinburgh running the indirect taxation practice for a big 5 accounting / tax firm, helping big businesses navigate their way around complex VAT laws and thereby screwing the general taxpayer.

    Fail, Phil. Although to be fair it’s the same kind of fail that National committed with reducing the company tax below the top rate of personal tax.

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  46. Luc Hansen (4,573 comments) says:

    The howls of outrage over this relatively innocuous and inexpensive announcement perhaps demonstrate that Phil has hit at least a small vein of paydirt?

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  47. Pete George (23,434 comments) says:

    You are confusing outrage with bewilderment that they could be so dumb. It’s a dumb idea, presented dumbly. The best thing about it is it’s so far from the election it might be forgotten by then.

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  48. Guy Fawkes (702 comments) says:

    Luc Hansen (1,981) Says:
    September 29th, 2010 at 10:02 pm
    The howls of outrage over this relatively innocuous and inexpensive announcement perhaps demonstrate that Phil has hit at least a small vein of paydirt?

    Always the smart arse!

    Frankly we are delighted. This takes fuckwittery to a new level. Especially as the Fiscal Genius that was Kullen thought it was a crap idea.

    3 terms with a decade of Power, and nothing like this mooted EVER!
    22% points adrift in the Polls, and suddenly it is Nirvana.
    Fucking Delicious.

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  49. Rich Prick (1,666 comments) says:

    “Phil has hit at least a small vein of paydirt?”

    Mining and comming up with wet dust, yep that’s about right.

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  50. tvb (4,326 comments) says:

    Growing veges and fruit is something people can do for themselves. Typically the Labour Party wants to give tax relief to those who cannot be bothered to do this and have hard working kiwis pay for this through tax increases elsewhere.

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  51. Grant Michael McKenna (1,158 comments) says:

    Regarding the poll question: Are you in favour of Labour’s policy to remove GST off fresh fruit and vegetables?

    I am completely in favour of Labour having this policy, as it is inane and will not gain them votes- those who vote for it will have voted for them anyway, and many will be turned off by their economic illiteracy. So yes, I am in favour of Labour having that policy.

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  52. Grant Michael McKenna (1,158 comments) says:

    In Praise of Frozen Vegetables
    http://yglesias.thinkprogress.org/2010/09/in-praise-of-frozen-vegetables/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+matthewyglesias+%28Matthew+Yglesias%29

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