Government’s GST Plans Leave Out PM’s Best Mates

“Yet again the government is proposing to implement a move which will penalise ordinary New Zealanders, but let the speculators and money manipulators who are the Prime Minister’s best mates off the hook”, says Democrats for Social Credit finance spokesperson Chris Leitch.

Its plans to introduce GST on on-line purchases will be costly, produce minimal tax revenue, and be of little benefit to kiwi retailers.

An innovative and forward looking government would instead be scrapping GST and replacing it with a Transactions Tax on the movement of all money from bank accounts.

At a level of around half a percent (as against 15% GST) New Zealand businesses would immediately be on a level playing field with their on-line competitors, and would find consumers with more money in their pockets coming through their doors.

Additionally businesses would be relieved of the burden of accounting for GST and filing returns.

The transactions tax should also apply to a raft of previously untaxed financial transactions such as credit default swaps, debt securities, convertible and exchangeable bonds, currency trading, derivatives etc, all of which currently avoid the GST net but which would contribute substantial sums to the tax take, more than making up for the scrapping of GST.

The Retailers Association, Manufacturers Association, and other business bodies should be pushing for a scheme of this sort to be implemented, rather than just eyeing the on-line GST issue.

The removal of GST would put more money in the hands of lower paid New Zealanders and contribute to a reduction in child poverty. It would also assist commerce due to higher levels of disposable income for many Kiwis.

It’s worth noting that eleven European countries, including France and Germany, have agreed to introduce a similar transactions tax which is also known as the Tobin Tax or the Robin Hood Tax, and more than forty other countries already have some form of transactions tax.

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