Stuff: Bill removing GST from healthy food drawn

from Stuff website

A Maori Party bill that would remove GST from healthy food could come up for debate in Parliament in the next few weeks.

MP Rahui Katene drafted the member's bill, which has been drawn from the ballot that is used to decide which ones reach the debating chamber. Two or three bills are usually drawn every second Wednesday Parliament sits.

It is likely to go on Parliament's agenda for a first reading debate when Parliament returns from recess next Tuesday.

The Government is expected to oppose the bill, which means it won't pass its first reading, but Ms Katene is gathering as much support as she can from other parties and hopes National will change its mind.

Revenue Minister Peter Dunne said today her proposal wasn't viable because if some items were exempted from GST there would be demands for others to be given the same treatment.

He said removing GST from the food specificed in the bill would mean the loss of millions of tax dollars which would have to be found somewhere else.

Ms Katene is appealing for the bill to be at least put through its first reading so it can go to a select committee for public submissions.

Her Goods and Services Tax (Exemption of Healthy Food) Amendment Bill says food prices have risen more than 20 percent in the last three years while real incomes have risen only very slightly.

"While all consumers will benefit from the removal of goods and services tax from healthy food, those on lower incomes spend a greater proportion of their income on food and will receive a significant benefit as a result," it says.

"Research conducted both in New Zealand and overseas shows that the lowering of the price of healthy food ... leads to a significant increase in purchases of healthy food."

The bill defines healthy food as fruit and vegetables, breads and cereals, milk and milk products excluding ice cream, cream products, condensed and flavoured milk, and lean meat, poultry, seafood ,eggs, nuts, seeds and legumes.

Maori Party should not support Nat’s GST hike

Rahui Katene, Finance Spokesperson for the Maori Party, has hit out at National’s proposed rise in GST. In a speech to Parliament on Tuesday 9 February, she said:

It would appear that we are shifting the burden of taxation from the people who can pay it to those who can’t. For those at the top income level, there are ways and means of claiming the GST back – they can set up trusts, they can increase rents, they can make the end user pay. But for those at the bottom level, there is no other place they can claim the money back from.

Katene who is the sponsor for the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill, repeated her party’s call for GST to be removed from healthy food. And for the first $25,000 of income to be tax free. She also expressed Maori Party support for “a minimum wage of at least $15 an hour”. Despite this, Katene and the other Maori Party MPs look likely to vote for the increase, as part of their “confidence and supply” agreement with National. The central issue appears to be the “compensation” the Government says it will pay to pensioners, beneficiaries and low income workers with children (through Working for Families), and the promise that low income workers will get tax cuts as well as the wealthy. However, such measures will provide short term relief at best. As prices continue to rise, compensation will be eaten away. A 2.5 percent increase in GST will continue taking money out of our pockets forever. Economic justice for the majority (e.g. the the 70 percent whose incomes are less that $40,000) means opposing a GST increase and tax cuts for the rich and all other moves that shift “the burden of taxation from the people who can pay it to those who can’t.” It means campaigning to take GST off food, to reduce taxes on the working poor and increase taxes on wealthy individuals and corporations – who’s ultimate source of wealth is the exploitation of workers and the natural environment. Through their support for taking GST off food, the Maori Party have made a stronger contribution to this campaign than any other party in Parliament. They should stand by this commitment and refuse to support National’s GST hike.

Above: Hone Harawira, Maori Party MP for Te Tai Tokerau, signing RAM’s the GST-off-food petition at the Kaitaia Markets

Rahui Katene: Shifting the burden of taxation to those who can’t pay

Rahui Katene

Finance Spokesperson for the Maori Party Prime Minister’s Debate Tuesday 9 February 2010

There was a statement that the Prime Minister made in his speech this afternoon that I am sure would be endorsed by every single member of the Maori Party – and I’m talking about the 23,000 members not just the five in this House. It was the recognition that he was “impressed and heartened by the resilience and optimism of New Zealanders and by their desire to do better for themselves, their families and their communities”. As I travel across Te Tai Tonga I am frequently in contact with people who are struggling to survive. The median family income for my constituents is $54,500 – some five thousand less than the median family income for New Zealand as a whole. Five thousand dollars that makes a difference at the petrol pump, at the supermarket checkout, at the pharmacy, at the bank. Today we are asking those same people to agree to a rise in GST to 15 percent. GST, of course, is an issue dear to my heart. Tomorrow, I will once again submit into the ballot my private members bill, the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill. This is a bill which has directly responded to the situation for the people of Te Tai Tonga; the people of the Maori electorate, every day New Zealanders who are powerfully motivated by the desire to do better for themselves, their families and their communities. These every day New Zealanders have suffered from the impact of food prices which have risen more than twenty percent in the last three years, while real incomes have risen only very slightly. Within that, we know that increases for the staples of a nutritious diet – such as fruit, vegetables and milk – have been particularly high. In response to the long term impacts this could have on public health, organisations such as the Public Health Association of New Zealand Inc and the Heart Foundation of New Zealand, have called for goods and services tax to be removed from foods which constitute a healthy diet to make them more affordable. I repeat – their call is for GST to be removed – not to rocket up to 15%. I want to make it absolutely clear that the challenge faced by many of our families is of the harshest kind. It is our families who suffer from the reality that New Zealand’s after tax distribution is one of the most unequal in the OECD. It is our families, disproportionately, who are suffering from the unacceptable level of child poverty. Rates which are so dire that the 2008 Survey of Living Standards reported 19 percent of children are experiencing serious hardship and unacceptably severe restrictions on their living standards. Mr Speaker, these are the faces of the families that I take with me into this debate. We are pleased that our consistent call to remember these families has been reflected in the announcements made earlier today by the Prime Minister. We have welcomed the decision of the Government that any decrease in personal tax would be done across the board. If there are across the board personal tax cuts, then we will certainly be doing everything we can to ensure that our people will see some sort of benefit. We have certainly noted the statement of the Prime Minister that fairness is a very important consideration to this Government. And so we will be talking closely with the Government about finding a common context for what we mean by fair. Is it fair that 51% of beneficiary families with children are ranked as experiencing serious hardship? Is it fair that 28% of families with children had serious health problems for at least one child in the past year? Is it fair that for 22% of families keeping the house warm is described as a major problem, with another 17 percent saying that dampness or mould were major problems? The challenge we face as a Parliament, is to ensure that the current levels of inequality and poverty are not intensified by the tax package highlighted today. It would appear that we are shifting the burden of taxation from the people who can pay it to those who can’t. For those at the top income level, there are ways and means of claiming the GST back – they can set up trusts, they can increase rents, they can make the end user pay. But for those at the bottom level, there is no other place they can claim the money back from. And so we will be greatly interested in the discussions around fairness and equitable outcomes, particularly as they relate to the low income. The key thing for us is that there is an opportunity for dialogue; and within that we hope to put forward some of the key ideas that we have promoted from the Maori Party. And so I go back to that collective desire that I would hope we share across this House, to respond to the aspiration of the people to do better for themselves, their families and their communities. As a first start we must do something to unacceptable levels of serious hardship that compromise living standards. We must increase the minimum wage – and by more than 25 cents – we want to see a minimum wage of at least $15 an hour. We are greatly pleased that the benefits, superannuation and working for families policies will be increased to assist people on low incomes. Now if we were really to show a level of responsibility for those more vulnerable, we would put measures in place to ensure that the first $25,000 of income is tax free. We need leaders who see that small is the new big. We need visionaries who can create opportunities for a new economy, who are not mired in old thinking and tainted by the existing economy. We need more Grameen banks - we need community banks. Vision is what we need – not more of the same. And so as a Coalition Partner with the Government we expect to be involved in discussions concerning the nature of the income support provided to New Zealanders. We do support the goals of reducing dependency on benefits, but it is absolutely critical that at the same time we maintain an appropriate safety net for those in genuine need. We are really concerned about the vulnerability of sole parents to fluctuating income. Sudden change can often have a detrimental effect on the whole whanau. We know that far too easily families go further into debt just to meet the basic costs of food, rent and power. For too many of these families the opportunity to take up full time work is simply not available. While we are supportive of efforts to gain better entry of Maori into the workforce, we will not accept any proposals which threaten the capacity of whanau to be able to maintain a reasonable standard of living. We do not want to see our whanau in a worse off position through any of the ideas being floated. And in this regard, I am honour bound to remind the House that in the design of the Working for Families, the policy architects of that scheme effectively cut out the poorest 200,000 children who have been left, floundering, in increasing poverty. Finally I bring us back to a concept that resonates with tangata whenua – He aha te mea nui o te Ao, what is the most important thing in the world? He tangata, he tangata, he tangata. It is people, it is people, it is people.