GST on Food

There is apparently a petition going ’round right now, asking the Government to remove the GST on food.

GST in our country stands for Goods and Services Tax, similar in concept I believe, to VAT in the U.K. In essence it is a tax on consumption and is currently rated at 12.5% across the board. There are very few things which are not subject to GST, like residential rentals and exports (zero rated, so not what you’d call exempt status) and some financial services I think.

In any case, the momentum for this request has clearly come from hugely escalating household costs. Its not just the food – and we’re still reeling from the 50% or so increase in cheese and butter – but also the petrol, and the flow-on increases which come from rising fuel bills. 28% increase in the supermarket over the last year according to a Herald survey.  Sounds pretty spot on to me, so its hard to blame anyone for feeling the pinch and looking for some relief. But calling for the government to step in – what folly!

Other countries observe our system (the GST that is) with some envy, because they’ve made their own versions far too complicated to administer effectively. And no doubt, having once gone down that path, find it nigh impossible to extricate themselves. New Zealand learned from these mistakes, and implemented a clean, uncluttered version which is no doubt much less expensive to administer and to collect.

Again, I have to begrudgingly admire Helen Clark for her initial refusal to consider such a prospect. On the basis of the political “balls” she generally displays, one has reason to hope that she will in fact stand her ground on this issue.

I am, like any Kiwi housewife, well aware of the all out assault that recent conditions (add high mortgage interest rates to that previous list) represent on the average family’s budget. But for some reason, the very idea of “Government help” evokes mental images of the endless queues of people in Gorbachev’s Russia, waiting to buy food for who knows how long, outside empty shops. 

And in asking the Government to step in, what does that really say about us? Whatever happened to the resourceful, self-reliant and proud Kiwis? Surely these well-meaning people who are advancing this petition, can spend their energies more usefully and constructively than begging for help? For whatever reason, they don’t seem to realize that they are by implication, fostering the idea that we are all somehow “helpless” in the face of all these external influences. That’s the opposite of empowering people. Can we come up with ways to empower, rather than sowing the seeds of helplessness/hopelessness?

As for the GST, it aint broke, so please … dont fix it.