GST plan: Robin Hood in reverse
The Government’s tax working group seems intent on taking from the poor to give to the rich, say Labour Finance spokesperson David Cunliffe and Revenue spokesperson Stuart Nash.
The GST views of Professor Norman Gemmell, who represents the Treasury on Finance Minister Bill English's tax working group, should send shivers up the spine of anyone earning less than $48,000 a year, they say.
Professor Gemmell has been reported in media as saying that increasing GST to 15% could balance out reductions in the 38% and 33% tax rates to 30%.
Stuart Nash said Professor Gemmell’s suggestion meant that “those on lower incomes would subsidise tax cuts for those earning the most."
David Cunliffe said: “Politics is about priorities. The tax working group’s recommendations will provide a crucial test of the Government’s direction.
“New Zealanders will see who gets what. Professor Gemmell’s proposal to put up GST in exchange for large tax cuts for the rich will add large insult to the injury caused by the 1 April tax cuts where the top three percent got 30% of the money.”
Stuart Nash said that he was astounded that Professor Gemmell could think aloud this way, especially during a recession.
"After National repealed Labour's tax cut package and substituted it for one which only rewarded people earning over $40,000, I am gobsmacked that a Treasury official can suggest that we should in fact tax the poorest in our society more in order to subsidise tax cuts for those earning the most. It’s unbelievable. Does he live in the real world?”
David Cunliffe said Labour favoured a progressive tax system, and acknowledged that a review of the current tax system is timely. “However, we don’t favour proposals that create further inequity in our society. The costs of adjustment must be shared fairly, not fall disproportionately on the most vulnerable.”
