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.