GST smoke and mirrors

Phil Goff
The Phil Goff doppelgänger. It seems to have beamed in from Alpha Centauri.

Winston First pinches Phil’s abandoned policy

“No GST on healthy tucker” said Phil Goff.

Yeah, right …

Once upon a time in a galaxy far away there was a bloke called Phil Goff who looked like leadership material and talked a lot of sense. When the dreaded Czarina, vanquished by the smiling assassin from Perill Grynch, scurried off to a lucrative sinecure in New York with a sigh of relief (and an eye on the Ruler of the Universe’s Secretary General’s job). Sensible Phil was sucked into a black hole, and a dysfunctional imposter replaced him.

The Phil Dalek charged out of its lair every week or two, savaged the PM with toothless gums, and offered a knee-jerk negative reaction to every government move, regardless of whether or not the attack was justified.

Phil got the chop and now David Mk IV takes over the savage gumming of Smiling John’s Gucci-clad heels. John Key could end world poverty, bring peace to the Middle East by next Friday, and re-invent cold fusion—Phil and the succession of Daves would proclaim it all the devil’s work. They scratch around for new causes to promote, with no regard to practicality or lack thereof.

One of their fiendish schemes was the old GST on food chestnut. Thankfully, when Phil got the chop so did that dodgy idea.

A few economically illiterate folk waved the banner for removing GST on food a while back and it was reported far and wide as a ground-swell movement for social change. TVNZ created a story bigger than the events which prompted it and now Winston First Peters has jumped on the bandwagon. Bandwagon-jumping being Winnie’s major source of exercise after race-baiting.

Think again Folks

Nobody with an ounce of nous is going to support removing GST from food. Just because Australia, Canada, the U.K. and who-knows-who-else have dysfunctional consumption tax regimes doesn’t mean that even the Czarina’s revisionist socialist leanings would’ve allowed her to countenance such economic stupidity. It just won’t work.

Back in the dark ages, when people still wrote letters, the social sec bought a writing pad in a bookshop in Vancouver. With a wink-wink, nudge-nudge, the shop assistant asked her if it was for educational purposes. If it was, you paid less and the consequent paper war was different from what it was if the purchase was for non-educational purposes.

Contemplate the maze of bureaucracy generated to police such a stupid setup. When the Labour government set up GST in the ’80s they consulted with Canada, who already had it. Canadian officials, having bowed to political pressure and set up a labyrinth of exceptions said, “Whatever you do, don’t allow exemptions, that way madness lies.”

It would be total lunacy

Here are a few reasons why.

  • The cost of administering exceptions would be huge. Who will pay for the resultant bureaucracy? No prizes for guessing that: Ewen Mee.
  • What are these basic food items from which the tax will be dropped? Cheddar cheese? What about French camembert? Whole fresh South Island hoki? What about canned caviar? Who decides? Yet another layer of public servants.
  • If we remove the 15% GST on food, do you really believe that prices will stay down? Not on your Nelly. When 10% GST was added all those years ago, prices didn’t universally rise by 10%. In many cases, commercial reality kept a leash on. By similar logic, removing GST will only result in a temporary reprieve. Inflationary pressures already in existence will push prices back up almost immediately. The market charges what the market will bear. You’ll pay.
  • The supermarket duopoly in New Zealand are notorious for screwing powerless suppliers and their retail prices for fresh produce have questionable direct linkage with normal market forces.
  • When the Treasury coffers are short a billion or two dollars forgone in GST on basic tucker, who’s going to make up the shortfall? No fooling you eh? Damn right, Ewen Mee will pay one way and another. The GST will come off, the unfettered food prices will sneak back up, other taxes will rise to compensate and we’ll have the aforementioned overpaid bureaucrats to deal with.

Forget it. Not even the greatest populist bandwagon rider in human history supported this one when it was Labour policy. Right Winston?

Doesn’t mean he won’t if he thinks there’s a few ill-informed votes in it though.

But the Aussies do it!

I hear your cry.

Yeah, and they put up with reject Kiwis, bush flies, brown snakes, Tony Abbott, and Pauline Hanson too. They only went along with that stupidity because they couldn’t have pushed the legislation through without a sop to the unwashed masses’ misguided beliefs. And they have far better productivity than we have so they have more money to throw away than we do—that’s another story.

GST off basic food? It ain’t gonna happen Winnie. And if the voters’ inexplicable love affair with Jovial John should wither when it finally dawns on them that he hasn’t actually come up with the goods and you do get a chance to make it fly, it’ll bite you in the bum when it crashes.

Trust me. 🙂

3 thoughts on “GST smoke and mirrors

  1. Agree with your ‘colourfully’ written paper, however, I do thnk 15% is way too high, alass it wont come down.

    But most of all i object to the reference to ‘reject Kiwi’s’…I was one of them for many years and if that what we are/were then since I have been back I have noted many that should be over there!!
    D

    1. My son and a couple of my mokos are on their way there Di. Just when a lot of other OzKiwis are starting to realise that things in the Lucky Country are looking a little fragile.

      That’s the next worry. What happens to our abysmally managed housing stock when tens of thousands of Kiwis return to the fold. It’s already started and could easily turn into a flood.

      🙁

    2. PS. I was bending reality over the reject comment Di. In fact, as you know, it’s the cream of the crop who bugger off to Oz. As the amoral Aussie government know full well. Ripping off the group who are their biggest taxpayers and smallest drain on their welfare system.

      Spent a bit of time profiting from the WA economic miracle myself when economic guru to the human race Rob Muldoon drove me out with 66 cents in the dollar tax on my Navy pension.

      Arsehole.

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