Goff’s GST pledge rewards top 10% three times more than bottom 10%

September 28th, 2010 at 10:00 am by David Farrar

If one goes to the Stats Household Expenditure Survey, it give details of spending on fruit and vegetables by income decile.

The poorest 10% of households spend $9.80 a week on fruit and vegetables. Assume two thirds is “fresh” and that is $6.53 they spend on fresh fruit and vegetables.

The “rich pricks” households making up the top 10% spend $30.70 a week on fruit and vegetables. Assume two thirds is “fresh” and that is $20.47 they spend on fresh fruit and vegetables.

The announcement yesterday means a weekly saving of 98c for the poorest households and a saving of $3.07 for the rich pricks. So the rich pricks gets more than three times the benefit of than the poor.

But let us give the final word on Goofynomics to Dr Michael Cullen, who said on 4 August 2004:

Hon Dr MICHAEL CULLEN: I am aware of many countries that have appallingly inefficient systems where they exempt various articles, where they have differential rates, and where one has to differentiate between food taken away from a place and food consumed within a place. Thank goodness we have not followed those very bad policies.

So we have it officially from the last Govt – “very bad policies”.

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40 Responses to “Goff’s GST pledge rewards top 10% three times more than bottom 10%”

  1. GPT1 (2,091 comments) says:

    If government money must be spent on encouraging poor people to eat fresh fruit and veges how about gardening courses for beneficiaries and free seeds? Plenty of dirt in this country.

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  2. Murray (8,838 comments) says:

    He’s also going to pay for it from the the health budget on the premise that the entire nation will suddenly become more healthy the day it becomes law.

    Or in reality he plans to cut the health budget.

    Slick move.

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  3. MT_Tinman (2,995 comments) says:

    The poorest 10% of households spend $9.80 a week on fruit and vegetables.

    What’s the figure when you remove chips, fries and crisps from this figure?

    Nil?

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  4. wreck1080 (3,735 comments) says:

    Yeah, there are umpteem scenarios which could be analysed.

    You forget to mention that the poor may actually start buying more veges if they were cheaper.

    But, generally, poor people are fat. Doesn’t matter how cheap the veges are. Check the USA.

    Poor people are on average more likely to have bad attitudes to life. Thus, they don’t care what they eat.

    Sorry to be so non-PC. But, maoris / PI”s are fatter than everyone else. It is not because of genetics, it is because they eat more rubbish.

    Tinkering with gst on broccoli won’t change a thing.

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  5. Brian Smaller (3,999 comments) says:

    GPT1 – Fuck that was funny. Poor people growing veges? Doing something for themselves? That must be an attack on their basic human rights.

    This past weekend my son and I built a new compost bin in the garden (3m x 3m) and four new raised beds. We did a lot of digging and now the garden is ready for my wife to do her magic thign with seeds and produce even more veges for us. GST free as well.

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  6. Michaels (1,317 comments) says:

    Another winner for Goff, I can see his ratings soar through the roof.

    However some of the poorest are not the brightest crayons in the box and will fall for his stupidity.
    And what does it say for one Mr Cuniliffe??
    Maybe Mr Goff and his finance spokesperson should go play in the said crayon box.

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  7. Inventory2 (10,114 comments) says:

    Tax cuts for the rich! Tax cuts for the rich!

    Phill Goff; the gift that keeps on giving!

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  8. krazykiwi (9,189 comments) says:

    Hang on a minute… tax cuts for those who pay a disproportionate amount of tax?!? That’s a great idea :)

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  9. OliverI (125 comments) says:

    “Goofynomics” – David, I think this is a phrase that we must coin!

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  10. s.russell (1,565 comments) says:

    I can see one redeeming feature in this idiotic populist policy: it is one less idiotic populist policy for Winston to campaign on.

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  11. shoreboy57 (132 comments) says:

    “Labour cuts health budget” – that’s a vote winner Phil

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  12. freedom101 (462 comments) says:

    Goff just lost a lot of liberal middle class voters. Anyone who looks at this issue realises that Goff has engaged in a naked vote grab and stuff the consequences for the economy, compliance costs etc.

    The big question, and the one that will lose him even more votes, is “what else would Labour be prepared to do to gain power?”

    Remember Kiwirail (where they painted up the loco for the press conference before negotiations were complete, and then burnt about $500m of taxpayer funds in a gift to corporate Australia)?

    Remember free student loans (with students now borrowing to the max, whether or not they need the money).

    Remember Working for Families (which puts a whole strata of society on 80%+ marginal tax rates).

    Labour are seriously damaging to our health. Maybe someone should mock up a cigarette pack warning of the dangers of voting Labour!

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  13. Jack5 (4,597 comments) says:

    Let’s remember who the fuckers are who are increasing GST.

    Why?

    More tax!

    Why not take the scalpel to the commissions, the handout agencies like Creative NZ, the proliferation of Klark-Khullen agencies and TV campaigns that tell us how to do everything from how to save to how to drink. What about the millions going to prop up lefty Television NZ and even more lefty Radio NZ?

    What about the billion(s) of taxpayer money that will go into fibre-optic broadband when this could be done by private enterprise? Forget this massive state intervention and the politicians might even be able to reduce the GST rate.

    Why so weakly tackle only one side of the national income statement?

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  14. burt (7,840 comments) says:

    This gives Goff a problem. The standard Labour MO of never admit mistakes puts him in a quandry here. He can’t say Cullen made a mistake because that’s not the self serving way and he can’t say he was wrong or Helen will be texting him 3,000 times a day for doing the unthinkable…. oh the joy of watching muppets forget the script while struggling to be relevant.

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  15. Michaels (1,317 comments) says:

    The whole thing reminds me of the free student loans but without the cherry.

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  16. burt (7,840 comments) says:

    Michaels

    It’s not quiet like interest free because it wasn’t announced on the back of poor internal polling a few weeks from an election.

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  17. krazykiwi (9,189 comments) says:

    what Jack5 said.

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  18. JiveKitty (869 comments) says:

    burt, you just don’t understand. Times have changed now. The GST at 15% is far too high for people to be able to buy fresh produce. There just needs to be an exemption so poor people can afford it! “When Michael rejected this, the GST rate was 12.5%. 15% is a different game.” (reference: http://blog.labour.org.nz/index.php/2010/09/27/gst-off-fresh-fruit-and-veg/comment-page-1/#comment-105319 ) It’s a pretty poor piece of spin, really, but when it’s all there is to work with I guess it’s the best that could be done.

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  19. burt (7,840 comments) says:

    JiveKitty

    Yes of course, I forgot of course that the first thing Labour will do if back in power is put income taxes up and reduce GST back to 12.5% because their previous experience tells them they can create a recession by doing that and therefore entrench more middle class welfare and make more people dependent on having a socialist govt that makes the state rich and the people poor.

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  20. david (2,539 comments) says:

    I’ve given up trying to argue on Red Alert ‘cos I sem to be permanently banned – presumably for arguing in a logical manner but can’t help pointing out a nonsense that seems to have been missed.
    Nash confirms that F&V will be zero-rated but only at the retail level.

    Now every restaurant, bakery and lunch bar buy F&V at some stage from “retail” outlets and many consumers buy at “wholesale” outlets. The F&V from a “non-retail” supplier will carry GST and presumably a GST invoce will be provided as required under the Act.

    The Supermarket will either need to interrogate the purchaser as to their intentions for the lettuces and capsicums and apply GST or not according to the answer or will automatically zero-rate them.

    The lunch bar will then have to add GST on at retail when he sells the filled rolls and will face a cash flow distortion when GST time rolls around, while the canny shopper at the wholesaler will pay GST on their home consumed veges. What a clusterfuck!!!!

    People will not be bothered, the system will be all f**ked up, and nothing will be gained.

    Well done Labour.

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  21. Guy Fawkes (702 comments) says:

    All National have to do is ban compulsory political funding from Union Members, and make it entirely a free choice.

    Check Mate.

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  22. Pete George (22,866 comments) says:

    This has to be a major strategic blunder. A two pronged campaign – criticise the GST increase because it supposedly favours the “rich” (even though they will pay even more GST relative to the “poor”), and remove GST from some things which will favour the “rich”.

    Are they really that dumb, or are they trying to fool dumb voters? I know the answer could be both)

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  23. freedom101 (462 comments) says:

    Yes, what about doing away with the “Union Education Fund” or whatever it’s called – the one that gives our money to unions to campaign for Labour. The problem I guess is that Smile and Wave probably agrees with the spending!

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  24. Pita (368 comments) says:

    The Labour party do understand their constituents… it’s the sentiment that counts, not the content

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  25. burt (7,840 comments) says:

    Pete George

    If the socialists didn’t rely on half thinkers voting for them there would be no socialism. Socialism has failed every single time it has been tried in every case yet the political arm of the unions still want us to believe it works because it is in the best interest of the unions.

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  26. Redbaiter (13,197 comments) says:

    Ooooh, lets all talk about GST while that corrupt bunch of communist losers calling themselves the Labour party try to get back into power and then grow government, increase taxes and regulate us to death.

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  27. Inventory2 (10,114 comments) says:

    @ burt – no; Labour has now officially ruled out rolling back the GST increase. The Axe the Tax bus triop which you and I paid for (as taxpayers) was based on a complete fallacy.

    Labour cannot be trusted, no matter who is leading the party, or pulling the strings from afar.

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  28. Chuck Bird (4,686 comments) says:

    “Goofynomics” – David, I think this is a phrase that we must coin!

    Leighton has. He has read it out on air and given full credit to David.

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  29. Murray (8,838 comments) says:

    They had nine years to take the tax off fruit and veg, they didn’t. It’s against their doctrine. If people are stupid enough to elect them again they’ll find him flip flopping because its too hard and then he’ll blame Key.

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  30. Angus (536 comments) says:

    ..had to laugh at Ozzy’s comment on this one
    http://oswaldbastable.blogspot.com/2010/09/fresh-fruit-for-rotting-vegetables.html

    “…Labour estimated the loss of tax revenue at around $250 million which could be met by increasing tax on tobacco….”

    “Of course ‘the poor’ are so good at putting the need for fresh fruit for their offspring ahead of their desire for fags [insert Tui ad here]“

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  31. queenstfarmer (748 comments) says:

    I wonder if Chris Carter will support Phil on this?

    Mita Ririnui: Why has the Government not removed GST from rates?

    Hon CHRIS CARTER: GST is designed to apply to the widest range of goods and services supplied in New Zealand. This ensures that the tax is as fair and equitable as possible. The GST regime works best with few exemptions, as they can create distortions and extra compliance costs.

    http://www.parliament.nz/en-NZ/PB/Debates/Debates/1/e/8/47HansD_20040324_00000013-Questions-for-Oral-Answer-Questions-to-Ministers.htm

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  32. Sector 7g (236 comments) says:

    Labour do not lower taxes. This is only a progressive step to reach the final goal of increasing tax on “unhealthy” foods.

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  33. tvb (4,210 comments) says:

    A few cents to low income earners who spend a small part of their food budget on fresh fruit and veges. This will be paid for by putting up income taxes on the RICH but I bet Goff will be very vague about that part.

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  34. Put it away (2,888 comments) says:

    hoist by their own dodgy maths. Love it!

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  35. GPT1 (2,091 comments) says:

    Awesome work Brian Smaller. 3×3 compost bin. That is damned impressive. I’ve got the black bins dotted about the place. Gave them a stir in the weekend. Some goodness in there. Sounds like your efforts left mine to shame, I dug in a bit of sheep poo and planted a couple of potatos in pots. Should be ready for Christmas though.

    In all seriousness it was only a generation or two ago that having a garden to supplement the food on the table was the rule not the exception and you only have to go back a bit further to find families relying on the garden. Got to love that welfare state.

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  36. DJP6-25 (1,274 comments) says:

    [GPT1 1:01 pm] Yes, reason #957 to loathe what the left do and stand for.

    cheers

    David Prosser

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  37. cabbage (454 comments) says:

    Meanwhile, New Plymouth folk are willing to have their cars clamped while parked in the carpark of a fresh F&V retailer, just so they can get their fix of fried chicken.

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  38. side show bob (3,660 comments) says:

    The kids have to take fruit to school for morning break, they call it brain food time. Perhaps Phil of it and the assorted tossers in Liarbore are planning to eat their way to genius status at taxpayer expense. I’m picking it will take several supertankers full of fresh fruit to lift the IQ of these socialist clowns.

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  39. eszett (2,337 comments) says:

    The “rich pricks” households making up the top 10% spend $30.70 a week on fruit and vegetables. Assume two thirds is “fresh” and that is $20.47 they spend on fresh fruit and vegetables.

    The Goofynomics announcement yesterday means a weekly saving of 98c for the poorest households and a saving of $3.07 for the rich pricks. So the rich pricks gets more than three times the benefit of Goofynomics than the poor.

    Doh! More like Goofyspin, really.

    Never mind that the top 10 households earn at least 5 times (likely way more than that) more poorest
    (just by taking the top bracket of the bottom 10 and the bottom bracket of the top 10)

    It’s in the nature of a GST. The more income you have, the more you consume, the more consumption tax you pay. And naturally any decrease in consumption tax will have a greater affect on those who consume more. Absolute values are more than misleading, that’s why you need to put that in relation to income.

    While I disagree with Labour’s GST announcement, you can surely do better than this.

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  40. GPT1 (2,091 comments) says:

    Exett – I suspect DPF can do better than this (and has). I took the article as a double dig at Labour’s incredibly stupid idea by both pointing out that it really doesn’t do what they say it will and using Labour-level logic against them.

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