Friday, 21 August 2009

Greens should come into line with leftists on GST

by Grant Morgan Green Party co-leader Russel Norman has issued a media statement on GST Stop messing with GST and start investigating a CGT. The good part is that the Green MPs will oppose lifting the rate of GST. But there are also significant bad parts to Norman's statement, such as: Norman calls on the government to "stop messing with GST". Yet, if the interests of the grassroots are to be served, the Green should be messing with GST, which is perhaps the central pillar of neo-liberalism in New Zealand. We need to get rid of GST altogether, and replace it with the likes of a Financial Transactions Tax that directly hits the speculators as reversals of the tax breaks enjoyed by the rich since the days of Roger Douglas. Norman justified a Capital Gains Tax on the basis that it "is found in most OECD countries". These same OECD countries, like virtually all countries in the world with a goods & services tax, exclude food (and often other essentials) from GST. Yet the Green MPs went against OECD and world trends by refusing to support RAM's GST-off-food campaign. This contradiction tears at the heart of Green politics in Aotearoa. Arguing against raising GST, Norman employs three basic ideas: 1. It "would hammer those in the lower and middle income brackets". In effect, Norman admits that GST hits the poor far more than the rich. That being so, why is the Green caucus still backing GST? 2. It would "likely send New Zealand into a deeper recession". That being so, wouldn't removing GST from food (and other measures to roll back GST) increase the spending power of the grassroots and thus assist in economic recovery? 3. "For most New Zealanders even a small rise in GST will wipe out any financial advantage they may have gained in last December's tax cuts". Yes, that is true. Yet the Green caucus argued against removing GST from food on the spurious grounds that it would give only a one-off benefit. In fact, the benefits of removing GST from food would not only be permanent, but would rise in value as food costs rose over time. The Green caucus appears to be in a wildly contradictory position in regards to GST. It is time that everyone on the left told them so. The Green MPs should be told to come into line with consistent leftists in OECD countries, and around the world, and start advocating for the removal of GST from food as a starting point to getting rid of this neo-liberal tax altogether.

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