Tuesday 29 April 2008

Latte liberals, neo-liberals and RAM's GST-off-food petition

by GRANT MORGAN Chair of RAM 29 April 2008 RAM seems to have really got under the skin of Labour's latte liberals! One of Greater Auckland's media-obsessed blogs that most fervently supports Queen Helen is Public Address. Usually they don't like to admit that "awkward people" like RAM even exist. That, however, has changed following the media scrum around RAM's GST-off-food petition. The Public Address editor, who admits to being "relatively well-off", has begun sneering at the "quite clever" way that RAM is mobilising "the poor people RAM claims to represent" who clearly want to remove GST from food. Yet, after trotting out the usual lame Labour Party excuses why GST simply cannot be removed from food, and then saying how hard it would be to introduce any other policy of real benefit to the increasingly dispossessed majority, all our esteemed editor can come up with is "the future seems to demand that something be done". Well, golly gosh! Does this accurately reflect the penetrating intellect and popular conscience of Labour's latte liberals? Just for once, why can't this comfortably-well-off social tribe show a degree of solidarity with the much more numerous and often deprived communities living in modest-income burbs like Manurewa, Henderson and Mangere? Well, if they did that, it would call into question their lack of coherent opposition to the market-driven neo-liberal strategy followed (despite narrowing policy differences) by both Labour and National. You see, unlike the latte liberals, RAM has a plan. We want GST off food because it is the tax cut of most benefit to people struggling to meet the bills, who pay a far high proportion of their total income on food than do the wealthy. And we want GST off food because it would erode GST as a regressive taxation system which punishes the poor so the rich can receive income tax cuts. GST is one of the central pillars of neo-liberalism which, over the last 20 years, has resulted not in a trickle-down to the bottom (as we were promised) but instead a flood-up to the top. Once we build a People Power movement that forces the politicians to remove GST from food, then we may well have the momentum to start removing GST from everything else. And that would open the way towards a more progressive taxation system which benefits the majority of low-to-modest income earners. Of course, that may not suit the "relatively well-off" editor of Public Address. Never mind. Have another latte and get over it. In fact, why not come down to my local cafe in Mangere Bridge and I will shout you a --- latte! FYI, below is the Public Address article in question.
PUBLIC ADDRESS 29 April 2008 It's quite clever on the part of Residents Action Movement to have latched onto the removal of GST from food products http://www.stuff.co.nz/northland/4500272a1927.html as part of its move to launch on the national stage http://norightturn.blogspot.com/2008/04/ram-goes-nationwide.html. But the idea itself is completely daft. Many other countries have chosen not to apply their GST-style taxes to some or all foodstuffs, but that's typically more a nod to social sentiment than practicality, consistency or effectiveness. Who'd bet against the 12.5% saving on food being at least partially swallowed up by increased margins, or simply more price rises of the kind we're already seeing? The cost, meanwhile, would be both in the simplicity and relative ease of compliance in the system we have, and in more than two billion dollars in government revenue. Critically, such a policy would benefit relatively well-off people who spend more money on food - that'll be me - far more than the poor people RAM claims to represent. The more straightforward solution - although it may not be any more politically palatable in an election year where the middle class feels it's struggling too - is to increase the household incomes of the poorest families, both through the device of the minimum wage and, if not raise benefit levels per se, bump up family support payments. Steve Pierson at the Standard has a more developed line of thinking on the issue http://www.thestandard.org.nz/?p=1802. It's unlikely that Labour will take up all the recommendations of the Child Poverty Action Group http://www.nzherald.co.nz/section/12/story.cfm?c_id=12&objectid=10506808. Labour has actually achieved genuine movement on child poverty, and may be feeling it has missed its chance to do more (you may imagine the political furore when benefit increases are followed by what seems like an inevitable rise in unemployment as the year proceeds) but with nearly a quarter of New Zealand children relying on fixed benefits, the future seems to demand that something be done.


Daphne said...

That "Standard" article is pretty hilarious reading, considering that obviously the Labour Party have worked out a scheme of talking points against the GST idea and they are parroting them in all blogs.

What is hilarious is that Russell's economically illiterate argument that removing GST would be "regressive" is apparently one of these talking points - even the Tories have to correct them on that issue! (Because on that score EVERY tax cut would be regressive!) However, I bet they continue to make that claim, just to muddy the waters - basic "conversational flak" meant to confuse.

The most hilarious of the comments is one by "randal" who is claiming that RAM is "in the national/act party camp". Watch out for this particular slander to grow legs, even though National and ACT are even more against the idea than Labour is. The Labour Party have an efficient network of "opinion-shapers" who are prepared to use all the black arts of propaganda to keep the easily confused blogosphere onside - RAM needs to fight this.

Steve Withers said...

The points you disaparage aren't being "parroted on all the blogs". They are valid points being used in discussions.

You'd be making better use of your time and enhancing your own credibility by responding with a detailed, reasonable for removing GST form food instead of engaging in the name-calling and abuse that seems to be the main content element in both your comment and the blog post you responded to.

As it is, I read the entry above and your comment and I'm having trouble taking abusive, apparently irrational people like the pair of you seriously.

There are very good reasons for leaving the GST alone and instead making the first $5,000 or $10,000 of everyone's income tax-exempt. This would put the most money possible into the pockets of the folk who earn the least. Tax cuts at the top end won't help anyone at the bottom.

Removing GST won't see the price drop by 12.5% because the retailer will then have to carry the cost of all the GST loaded into the things they bought from their suppliers. They can't claim it back.

Creating a mixed regime of tax / non-tax will create more compliance cost for businesses and that will be included in the food.

These are good, solid reasons for leaving things as they are. You need to respond to them in a sensible and mature way.

Or you're wasting your time.

Daphne said...

The points you disaparage aren't being "parroted on all the blogs".

Yes they are. The Standard's "seven points" were repeated virtually word-for-word by Russell Brown, and again by someone called "Mel B" at a NZ politics student website. We are wise to how "astroturfing" - creating the illusion of grassroots - is done in the blogosphere.

Of course, the blogosphere is so insulated from the real world of - as Grant says - places like Henderson, Mangere and Manurewa, that all this personalised slander will be of limited effect on RAM's actual petition drive. Concidentally, when "latte liberals" want to put down actual working class and grassroots people, these terms like "abusive", "irrational", etc always come back - the idea is that those less well-off than blogowners are primitive savages who can't be trusted to participate in discourse, and need "opinion shapers" like our friend Russell to tell them how to think.

Although, I will give you this: making the first $5,000 or $10,000 of everyone's income tax-exempt is a very good idea.