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Source: ONE News
Labour is considering removing GST off food if it forms a future government.
The idea, which has some support from grassroots members of the party, is part of a wider look at policies as Labour continues to struggle in the polls.
The government has signalled GST may rise to 15%, from the current 12.5%, in the Budget on May 20.
Labour has shied away from saying it would scrap the move if elected at the next election, but its finance spokesman David Cunliffe said this morning that the move was being considered.
He also confirmed that there are discussions within the party to exempt food from GST, following a policy already in place in some countries including the UK.
However, Cunliffe told Radio New Zealand the proposed move has not yet been discussed by the Labour caucus.
There is some evidence of support for the idea among Labour supporters. One commenter on the Grassroots Labour website said a 20% tax on luxury goods could make up for the shortfall.
Labour leader Phil Goff is set to unveil a wide-ranging review of policies at a speech in Nelson next week.
This is understood to also include possible compulsory superannuation and further limits on foreign ownership of New Zealand farms and land.
Cunliffe said the party was "setting up a very high quality process that is looking at some fundamental problems in the New Zealand economy".
He said it was unrealistic to expect that New Zealand could match mineral-rich Australia in terms of that country's saving policies, but it was "absolutely critical" that New Zealand got its superannuation planning right.
New savings products were needed that were safe for people to invest in.
Another contentious issue - overseas ownership of farms - was also being discussed, and Cunliffe said loose policies in that area could lead down a dangerous path.
"For a start, Kiwis could find it difficult to get to the beach - as they do in Northland - because a lot of the coast is foreign-owned already.
"Secondly, how would Fonterra maintain its base if a large chunk of its milk supply was bought out by competitors, it's a strategic nonsense for New Zealand."
Policy is set to be confirmed before the budget on May 20, and parts of it are expected to be revealed next week by Goff.
How do you feel about removing GST from food? Have your say on the messageboard below.
Add a Comment:
Post new commentcueboy said on 2010-09-28 @ 10:14 NZDT: Report abusive post
Grab Snatch and Take. (GST) I saw Bill English on the TV interview, when talking about GST increases. What was the phrase Theres no free lunch here, Well he is getting one $140 per week extra with the Tax Changes. Gee what a clown that man is, berreft of ideas.Remember the French Revolution Mr English, " Let them eat cake"they the rulling classes lost thier heads in 1792.
cueboy said on 2010-09-28 @ 10:04 NZDT: Report abusive post
I think what people have realise that TAX is a form of legal theft on the part of elected Governments.And TAX on TAX is criminal itself.Unfortunatly tax like Insurance is a necessary evil.The only way you will stop spiraling costs is for manufacturers and business to stop this incesant drive to maximise profits,and at whatever cost.For a start there is no such thing as an honest businessman.Some will take advantage of the GST increase to raise prices. Shop arround and boycott these traders.
Graham_White said on 2010-09-27 @ 17:48 NZDT: Report abusive post
I am very disappointed with this proposal. The simplicity of NZ's all inclusive goods and services tax has been praised worldwide by tax experts and up until now our two major parties have opposed any tinkering with the scheme. Once so called "fresh" fruit and vegetables are exempt I fear that further exemptions will be added at some later date as a vote-catching device. Let's not start the tinkering please!
dancingqueen said on 2010-09-27 @ 17:34 NZDT: Report abusive post
The retailers, put what ever price they want on fruit and vegetables, not having any GST on these commodoties will make NO difference whatsoever. Why don't people grow the own vegetables/fruit then you won't have to buy them at all. Vetting what has GST and what doesn't will be a headache for some people. I think it is a waste of time. Laughable actually.
imho said on 2010-09-27 @ 16:39 NZDT: Report abusive post
Just more political b/s from Goff - the fact is that removing GST wont affect prices of fruit and veges at all as they are constantly varying due to supply and demand - mainly affected by the seasons hence when we have a good season with plentiful supply the prices are lower - maybe he should get up early one day and go to Turners auctions to see what really sets the prices! I can see the difference in some families being spent on paying for the extra tax that Goff will put on tobacco !