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There are growing calls for the abolition of GST on food as a way to combat the impact of rising grocery prices.
Supporters say it would give poor families welcome relief and
even stimulate the economy while a nationwide petition calling for
the abolition of GST on food is getting growing
support.
Petition organisers say help is needed for the increasing number of
people struggling to pay their bills and more than 3000 have now
signed the petition.
The rising cost of living has prompted The Residents Action
Movement to target supermarkets around New Zealand getting people
to sign the petition.
The action group says it is not just poor people signing and they
have had signatures from upmarket suburbs, with 200 signatures in
less than an hour.
The petition organisers say New Zealand is one of only three developed countries in the world which taxes food.
"GST on food its basically like taxing the air we breathe...essentially it's punishing you for eating," spokesman Oliver Woods says.
The Residents Action Movement says it has been light on marketing after starting the petition a few weeks ago and it expects to get a lot more signatures.
New Zealand has had GST on food since the tax was introduced 22 years ago and while other countries like Australia don't tax basic foodstuffs, the Prime Minister is ruling out introducing similar measures here.
Helen Clark says it is better to look at the many supports the government has for families like Working for Families, and its programme of tax relief.
"The GST system in New Zealand is widely admired as one that is very simple to administer," says Clark.
The Prime Minister says she doesn't want New Zealand to go the way of other countries where people are asking at the point of sale if GST applies.
The government's rejection of removing GST from food is backed by National, Act and United Future.
Act leader Rodney Hide says while he can understand the case being made, the idea is not a good one. He says defining food can be a complicated matter and businesses would face additional costs and complexities in dealing with such an exemption when doing their accounting.
Hide says the way to ease the squeeze on people's costs is by boosting their incomes with tax cuts.
Green MP Sue Kedgley says her party is looking at the GST issue but there are other options the government should consider to deal with rising food prices. She says this includes raising wages, benefits and pensions so people have more in their pocket.
Kedgley says she does not see tax cuts as the silver bullet solution to the issue.
The government says tax cuts to be included in the Budget will offer some relief but some say the removal of GST could be a sensible alternative to personal tax cuts.
"If the economy does get a bit more difficult it's the people who are least able to deal with it, the most vulnerable that need the most help," says John Wally from the New Zealand Manufacturers and Exporters Association.
But removing GST on food would have a big impact on the government's tax take, in addition to costing millions of dollars to administer.
