Changes to GST regime bad news for hard-pressed New Zealanders
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The first recommendation emerging from Finance Minister Bill English’s tax working group – increasing the level of GST --- is bad news for hard-pressed New Zealanders, say Labour revenue spokesperson Stuart Nash and finance spokesperson David Cunliffe.
"The recommendation has serious implications for low-income and fixed-income New Zealanders, those who are least able to adjust to a new regime," Stuart Nash said.
"I note that the working group suggests that the Government should consider compensating those on lower incomes as part of any tax reform package, but I doubt that a National government can be trusted to provide the sort of compensation that vulnerable individuals and families would inevitably need."
David Cunliffe said the Government also needed to take into account that lifting the GST rate to 15 percent or even 20 percent in a time of recession, with unemployment having doubled over the past 12 months, would have a crushing impact on New Zealanders who were already struggling to cope.
"Just in the past few days, for example, debate has intensified over how much New Zealanders are paying for electricity this winter," David Cunliffe said.
"The reality is that many New Zealanders find it difficult to afford to pay for basic needs like heating their homes. A broad brush measure like raising the level of GST cannot be seen in isolation. It has to be seen in the context of everyday life for many New Zealanders already finding it hard to make ends meet."
Stuart Nash said the Government needs to take into account the human cost of any proposed tax changes and not just the fiscal and revenue implications.
"International benchmarking means nothing to hard-working New Zealanders who simply want a fair deal,” said Stuart Nash. “Any review of the tax system must have regard to a sense of social responsibility."
