Labour’s iTax

March 22nd, 2013 at 11:19 am by David Farrar


Sent in by a reader, in response to my blog post yesterday on David Cunliffe saying it was a no brainer to reduce the threshold on which is applied to online purchases from overseas.


24 Responses to “Labour’s iTax”

  1. Pete George (24,828 comments) says:

    I’d like to see where Cunliffe actually said that.

    I asked him on Twitter what threshold he would suggest and he claimed he has been misreported, referring to the Tom Pullar-Strecker article and yesterday’s post he replied:


    TP-S writes up a question as a statement and DPF goes ape… Calm down folks there is more work to be done on that question.

    Labour on GST on overseas purchases

    [DPF: If Stuff correct their article, then I’ll do an update. I have no reason to think Stuff has it wrong]

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  2. Lloyd (125 comments) says:

    A Labour person ‘mis-spoke’. Wow. That’s never happened before.
    Oh, they were ‘mis-reported’? By those nasty, right-wing newspaperfolk. Gosh.

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  3. Pete George (24,828 comments) says:

    Lloyd – I’d prefer to see the evidence before making a conclusion.

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  4. Redbaiter (11,656 comments) says:

    “Lloyd – I’d prefer to see the evidence before making a conclusion.”


    PG- The responsible and careful adjudicator setting an example to us all.

    Like you did on Rod Hide??

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  5. hubbers (287 comments) says:

    Personally I can’t imagine Labour deliberately making things more expensive for regular Kiwis during a recession … you have to wonder what their motivation is.

    Maybe they are allergic to votes?

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  6. big bruv (15,617 comments) says:

    Of course silent t will bring that tax in, like the National party they have not yet a tax they do not love.

    Still, it will not make a blind bit of difference really. Shopping on Amazon is so damn cheap that even a 15% tax will not stop me.

    I now buy all my shoes from Amazon. Some months ago I walked into the floorshiem shop at the bottom end of Queen Street, the response I got from the salesperson was arrogant, snotty and rude. If that was not enough the prices were astronomical, from what I could see they were all around the $400-$500 range. I should also say that they were far from top quality being glued soles as apposed to stitched.

    Anyway, I asked politely if I could try on a pair, found that I take a 9 EEE and thanked the stuck up prick for his “help” and told him I would think about it. I came home, jumped onto Amazon and purchased three pairs from the USA (stitched sole) for $450 NZ.
    All three pairs arrived ten days later. They are simply the most comfortable shoes I have ever purchased

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  7. mikemikemikemike (517 comments) says:

    I’ll start off by saying that I often make purchases online and enjoy the regular savings I make as a result (particularly with our currency the way that it is) but….

    I realise this will probably result in a series of ‘thumbs down’ votes (with no one engaging in an actual debate) but if you have to have GST at all, then surely it should apply to all purchases? Otherwise the local retailers are at an immediate disadvantage when trying to compete.

    Consider too that often they will have propspective buyers come in, take up sales time answer questions for someone only to have them go home and use that sales collateral to make a purchase online.

    I’m all for competition and ensuring I obtain the best possible price for most things, but those in business and selling their goods and services need to be able to compete in an arena that doesn’t put them at an automatic 15% disadvantage – am I wrong?

    [DPF: GST works by taxing the seller. You can not tax overseas sellers. Yes tough for some local retailers but the Internet also allows NZ businesses to sell to the world – like Xero does.

    The only way to enforce GST on buyers is stopping parcels at the border, and invoicing the end customer and refusing to give it to them until they pay. For that reasons Customs only do it if the value of the GST is more than $60, as the costs are massive.]

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  8. Pete George (24,828 comments) says:

    Red: “Like you did on Rod Hide??”

    Yep, I talked to Act party members including the president and got Hide’s version directly from him. Maybe you missed: TV3, ACT, and make believe news

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  9. sparky (235 comments) says:

    Labour and the Greens will Tax you on everything, there is no doubt in my mind about that. It is in there DNA, they need your money to spend on there pet projects. Hence the comment TAX and SPEND. Typical socialist parties.

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  10. peterwn (4,338 comments) says:

    There is nothing wrong in principle with charging GST on private imports, it is fair’s fair. The main issue as I see it is the imposition of a customs processing and collection charge on top of the GST. If there was a cheap, easy and automatic way of collecting the GST without the need for a surcharge, there can be no objection to levying such GST.

    Labour is being unprincipled with this. Seems Labour only wants to impose taxes ‘other people’ have to pay. For consistency with this objection, Labour should promise to abolish GST on day to day purchases that ordinary people buy – eg most lines in the Warehouse exempt GST, but GST payable on everything in Kirks or Simth & Caughey’s.

    As far as books are concerned, it seems unrealistic for the book trade to stock every imaginable title people want and an international facility such as Amazon provides a cost effective way of meeting such demand. With the demise of Borders (Wellington) and Dymocks the range of books available locally seems to have reduced significantly. Whitcoulls for example has removed the tall shelving from the former Borders Wellington shop and replaced it with low level shelving, so the titles stocked has probably reduced by 40% or more.

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  11. Dean Papa (788 comments) says:

    and be aware that they are not just going to hit you with the GST, they are of course going to make it worth their while. There are other taxes they will add on, such as a biosecurity fee (I think that is compulsory already) and other import entry taxes, the value depending on the nature of the goods you want to import.

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  12. Ed Snack (2,836 comments) says:

    Big Bruv, I think I would sympathise with the Salesperson, given your online persona! And you rip them off, use their time and effort to help you buy elsewhere cheaper, no wonder they’re less than happy. Lots of “bricks and mortar” retailers are finding this an issue, “customers” visiting, trying stuff on until they know what they want, then going and buying from someone who doesn’t maintain the overhead of stock to be tried on. Just think if you couldn’t try them, found that the size you ordered was wrong, ship back to the USA, get new pairs, they’re not right either, send them back, try another brand… There are something’s that are harder than others to buy online effectively. It certainly helps if you can fit standard sizes though.

    I know that some places that sell online have to maintain quite a comprehensive returns system with costs associated to deal with the general issue, but others simply rely on the normal retailer to provide a service that they (the online seller) doesn’t pay for. Eventually we may see a try on fee, deductible from any purchase. I notice that Wineries apply a similar tasting fee as a concept.

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  13. dc (176 comments) says:

    The poster reads like an argument against GST per se. Personally I wouldn’t object to GST and duty (if any) being collected on delivery at the post office, with say a $30 total value threshold on the declared value of the package plus shipping, and a $15 handling fee, as is already done in the UK for example. That would level the playing field and give NZ retailers a chance to compete properly. It wouldn’t be popular, but it seems the fair and responsible thing to do.

    I do object to the current customs fees of $30 import entry transaction fee and $18 biosecurity levy, that’s an excessive revenue grab for simply doing what we already pay them to do.

    Amazon will already put the GST on your bill if you’re ordering direct to NZ and go over the $400 threshold, so it would be very easy for them to adjust the threshold. Similarly iTunes could easily add GST collection at source.

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  14. Viking2 (14,467 comments) says:

    It surprises mr that DPF is being so disingenuous over this. Its not just GST that needs recovering but also the other things like ACC that doesn’t get charged and the social costs the other Kiwi’s get taxed for to provide for those that choose to buy cheaper on line.
    At what point do we abandon any GST collection or recouping of the community social costs that allow Kiwi’s to have their entitlement to hospitals and doctors and education?

    Oh none of you use those things. Really?

    either all this stuff is caught in the net or none should be. Perhaps you would all rather have higher taxes on the stuff you have to buy here like your Doctors fee’s or your groceries just so a few can have cheap shopping on the net.

    Its not a simple justification at all. Just like those who go to the Jewelers before departing for a holiday, buying expensive jewellery, claiming the GST as its being exported and returning wearing the same jewellery. Haven’t heard of that rort, well it exists.

    collecting the GSt is actually very simple, requires a transaction tax collected by the card companies and banks and passed onto the IRD.

    No gst paid, no entry.

    Dunne can do that no sweat at all.

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  15. duggledog (2,394 comments) says:

    Big Bruv @ 11.44
    What the &$#@! were you doing on Queen Street are you mental? Hoping you have a valid excuse

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  16. mikemikemikemike (517 comments) says:

    Big Bruv illustrates my point exactly. We have a wage system in NZ that requires that people are paid a certain rate of money, couple that with the cost of running a building, carrying stock and all of the others costs associated with selling a pair of shoes….to then have someone come in and take advantage of all of those services (free) only to hand the money to an overseas company would piss me off too.

    I thought you advocated user pays. Would you bitch and moan if you were charged a fee to come and and try those shoes on? It seems fair

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  17. OneTrack (4,602 comments) says:

    “Labour thinks its a no brainer to tax you 15% for online shopping” – WTF?

    That will be the least of your worries when Labour/Green/Mana/? get in, in 2014. They have all been banging on forever now about “John Key’s unaffordable tax cuts”. In reality-speak that translates as, they are going to increase PAYE tax rates when they get in – no online shopping will be required (yes, they may do that too).

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  18. Redbaiter (11,656 comments) says:

    “I take a 9 EEE”

    Obviously your feet are a lot broader than your mind.

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  19. Dean Papa (788 comments) says:

    As one of the bludgers who shops cheap on the internet (although my main motivation is variety and convenience), I’d have no problem paying the GST. What would ruin the experience is having to pay all sorts of other taxes on top of that, not to mention the necessary extortion letters to be received. I expect my mail to be delivered promptly. It would take a lot of the pleasure out of online shopping. Perhaps we could declare any online shopping in our taxes, and pay any GST owing then?

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  20. decanker (223 comments) says:

    DPF: “I have no reason to think Stuff has it wrong”


    Sure it wasn’t a Stuff Nation story?

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  21. big bruv (15,617 comments) says:

    Very droll Bedwetter.

    Come to think of it, my shoe size is the same as Sarah Palins IQ.

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  22. Mary Rose (393 comments) says:

    >Amazon provides a cost effective way of meeting such demand.
    >With the demise of Borders (Wellington) and Dymocks..

    Anyone see a connection between those two statements?!

    I don’t know what the answer is: cheaper goods/wider range are obviously attractive. But not being able to browse shelves and discover books I’d not have known existed otherwise would be a big loss.

    If store chains can’t adapt to internet competition and die, what sector will replace the jobs thus lost to overseas warehouses?

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  23. Mary Rose (393 comments) says:

    Does the thumbs down person thinks job losses in NZ are a good idea?
    Do they have a thing against browsing shelves?
    Do they dislike it that I don’t know the answers?
    Or do they just dislike questions? 😉

    The trouble with this popularity contest system is you can’t debate back, as you’ve no idea what people are objecting to.

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  24. edhunter (579 comments) says:

    I like music, I like to support local retailers, I like instant gratification & like to have a physical item in my possession instantly. But if it costs me say $25.00 at JB HiFi & only $5.99 on Amazon it really is a no brainer, for the cost of 4 CD’s at a local retailer I can get 15+ from Amazon (including p&p) within 3 weeks I say bring on the 15%.

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