Braindead policy on GST

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

Phil loses the plot yet again

“No GST on healthy tucker” says 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. Then the dreaded Czarina was vanquished by the smiling assassin from Perill Grynch. She scurried off to a lucrative sinecure in New York with a sigh of relief, sensible Phil was sucked into a black hole, and a dysfunctional imposter replaced him.

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

John Key could end world poverty, bring peace to the Middle East by next Friday, and re-invent cold fusion—Phil would proclaim it all the devil’s work. He scratches around for new causes to promote, with little regard to their practicality or lack thereof.

One of his fiendish schemes is the old GST on food chestnut.

A few economically illiterate folk waved a banner or two about 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 Phil has jumped on the bandwagon.

Think again Labour

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, I was second engineer in the biggest RO-RO ship in the world, m.v. Skeena. The Social Secretary accompanied me. It was a great job, carrying cars from Japan to Canada and the US West Coast, then timber products back to Nippon. 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 rise by 10%. 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.
• 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. 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, 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 Phil. You may have re-discovered your socialist roots but that won’t help you to make this pig fly. And if the voters’ inexplicable love affair with Jovial John should wither when it becomes clear that he isn’t coming 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. 🙂