Tax Justice media release
23 September 2010
Last year, prime minister John Key got a lot of media attention for his pen drawing of what he thought a new national flag for New Zealand should look like. He drew a silver fern.
“John Key should have drawn something that better reflected what his government had in store for grassroots New Zealanders,” says Vaughan Gunson, Tax Justice campaign coordinator.
“Because on 1st October a long black cloud will descend on the lives of many New Zealanders when GST goes up to 15%.”
“The GST hike will disproportionately effect low and middle income earners who spend all their income each week on the basics,” says Gunson.
“Once you factor in inflation and stagnant wages, the GST increase will wipeout the meager tax cuts most people get from the National government’s tax changes,” says Gunson.
“While high income earners who save and invest a higher proportion of their incomes, and therefore don’t incur GST, will effectively be paying a lower rate of tax.”
“The injustice is then compounded, because it’s the same people who pay less GST as a proportion of their income who get by far the most from National’s income tax cuts,” says Gunson.
On paper the calculations look like this: someone earning $15 an hour will be $4.13 better off from the tax changes, while someone earning four times as much – $106,080 annually – will have $43.08 more in their pay packet. Your average CEO earning $265,200 will be richer by a whopping $153.92 a week (Source: Bill Rosenberg, Council of Trade Unions economist and policy director).
“As a result of National’s tax changes the rich will have more money to save and invest, allowing them to get richer, thus increasing the already terrible wealth divide in New Zealand,” says Gunson.
The Tax Justice campaign is proposing a fair alternative. The focus of the campaign is petition requesting parliament to:
1) Remove GST from food; and
2) Tax financial speculation.
“Taking GST off food would deliver a tax cut that wouldn’t be unfairly tilted in favour of the rich,” says Gunson. “A family spending $200 a week on food after 1st October will be paying GST of $26.09. Take the GST off food and you’ve got a tax cut more substantial than most of us are going to get from National’s tax changes.”
To protest the GST increase, Tax Justice supporters will be collecting signatures around the country on Friday 1st October and Saturday 2nd October.
“We expect to get a very positive response,” says Gunson. “We will significantly add to the 12,000 signatures we’ve already collected.”
Go to www.nogstonfood.org for more Tax Justice media releases and articles on the campaign.
For comment, contact:
Tax Justice campaign coordinator
Tax Justice media spokesperson