Tax Justice media release
1 February 2011

Threat of 17.5% GST sickening

“Increasing GST to 17.5% would make it even harder for ordinary Kiwis to make ends meet,” says Vaughan Gunson, Tax Justice campaign coordinator. “It will be sickening thought to most people”

“The recommendation of the Savings Working Group to hike GST up again shows there’s an agenda within government to pile more of the tax burden onto grassroots New Zealanders,” says Gunson.

GST is a horrible regressive tax. Low and middle income earners spend all their money each week, while the rich can save their money, invest it, or go on overseas holidays The wealthy pay less GST as a percentage of their income.

“Increasing GST while lowering the tax paid by the rich and big corporates will increase income inequalities in New Zealand still further.”

“The tax changes of the last 25 years have been all about allowing the rich to grow their wealth, while the rest of us get taxed every which way,” says Gunson. “GST, rates, user charges, petrol taxes, student loans – all these things impact on grassroots people disproportionately.”

Tax Justice was set up to promote solutions that will shift the tax burden off ordinary Kiwis and onto the super-rich.

A petition calling for GST to be removed from food and a tax placed on financial speculation instead has received 25,000 signatures.

“Even by the Savings Working Group’s own terms of reference their recommendations are wrong,” says Gunson. “New Zealanders are suffering from high debt levels because wages are low and many people are struggling with massive mortgage debt, thanks to the housing bubble encouraged by greedy banks.”

Tax Justice is calling for a Financial Transaction Tax that targets the money flows of financial speculators and banks. This would discourage a damaging economic activity and generate government income which could be used to create jobs for New Zealanders.

ENDS

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