Monday, February 22, 2010

Will we be better off with an increase in GST or not, Mr Key?

Earlier this year John Key said he would cancel plans to raise GST if evidence shows people will be worse off.

Then he said that he wanted to make sure that low and middle income New Zealanders aren't worse off. Peter Dunne has echoed this in saying he'd want to make sure that low and middle income families are not hurt buy the GST rise - and that is a "key part of the policy." So does Dunne think it is ok if people are detrimentally affected, as long as they are not hurt?

Now Key is saying that it is his expectation that " the vast majority of (people) will be better off". This means that his expectation is that some either will be worse off - or will be neither better or worse off. If raising GST is fiscally neutral, why do it? The latest poll said that 63 per cent did not believe they would be better off from the resulting tax cuts. And given that half of all taxpayers are taxed about half of their income at the 12.5% rate, that's no surprise..For most people, it is other people who will be better off.

Labour thinks it can exercise some leverage on this . They are doing another tour. The wheels on the bus go round and round and we`ll see if people think Phil Goff is sincere -after all he did vote to increase GST from 10-12.5% - without adjustment to benefits.

If Key wants to make sure that low and middle income New Zealanders won't be worse off with a GST rise, he's not telling us how that will happen. Yet. And isn't it about time for Goff to state that Labour would repeal any GST increase, if indeed he is sincere in saying that an increase is A Bad Thing.

Or will the wheels on his bus stop going round and round - and fall off.




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