Labour abandon their own GST principles

Phil Goff today abandons the concept of a simple all inclusive GST. Taxation experts time after time praise our GST for its relative simplicityand fairness as it applies to everything.

The Herald reports:

A Labour-led Government would scrap GST from fresh fruit and vegetables to encourage healthy eating and help New Zealanders as higher GST on other goods is imposed.

This is an exceptionally bad move, because it is the start of a very slippery slope.

For 25 years, lobby groups have pressed National and Labour for a GST exemption for their pet cause. Up until Phil Goff, major party leaders have had enough fortitude to say no. They have said GST is about having a consumption tax – it is not a device for designating what goods are “good” or “bad”.

Once you concede that principle, you can’t say no to all the other requests. We saw this in Australia, where a Government had to exempts tampons from their GST, because of a campaign.

By saying fruit and vegetables will be exempt (as they are good and healthy), how can a Goff led Government possibly stand firm against say a campaign to reove GST off medicines? I mean, how dare the Government tax people for being sick.

Next to go will be GST off doctor’s visits.

Then my God, how dare you tax the school bus. That must become GST exempt.