FFS leave GST alone Chippy

[Wainuiguy]

http://www.stuff.co.nz/national/politics...pp-android

A policy that will save the average family $4-5 a week.  A policy trumpeted loud last week in breathless emails to the devoted saying they had a "massive" cost of living announcement this Sunday.  Except Nicola Willis had already announced it 10 days prior.

A policy Labour's Finance Minister says is unworkable 

A policy Labour's Revenue Minister likely resigned over

A policy that is almost universally being panned by tax experts and economists 

If Chippy thinks this is the win he was wanting then by next poll he will be sorely disappointed.

GST is almost the perfect tax.

Everyone pays it.

Poor people pay less of it and rich people pay more.

[king1]

it isn't necessarily just a cost of living policy though, moreso about making healthy eating choices cheaper compared to the non-healthy choices. So from that POV it is beneficial as a means of promoting healthy eating and presumably reducing costs to society in other areas in the future...

But I agree I don't think this is game changing policy by any means...

[SueDonim]

http://www.stuff.co.nz/national/politics...pp-android

A policy that will save the average family $4-5 a week.  A policy trumpeted loud last week in breathless emails to the devoted saying they had a "massive" cost of living announcement this Sunday.  Except Nicola Willis had already announced it 10 days prior.

A policy Labour's Finance Minister says is unworkable 

A policy Labour's Revenue Minister likely resigned over

A policy that is almost universally being panned by tax experts and economists 

If Chippy thinks this is the win he was wanting then by next poll he will be sorely disappointed.

GST is almost the perfect tax.

Everyone pays it.

Poor people pay less of it and rich people pay more.

Exactly. On all points.

I saw the Herald article which has this sentence at the end “Furthermore, it is not clear whether the benefit of specific GST exceptions are passed on to consumers”. 

That pretty much says it. Changing systems to drop GST will cost every business along the supply chain and will need to be recouped somewhere. Then, over probably a fairly short time, price creep will just take it all back to where it is now and really no one will save anything.

[harm_less]

it isn't necessarily just a cost of living policy though, moreso about making healthy eating choices cheaper compared to the non-healthy choices.  So from that POV it is beneficial as a means of promoting healthy eating and presumably reducing costs to society in other areas in the future...

But I agree I don't think this is game changing policy by any means...

All good in theory but the cost of getting a GST system running that excludes certain items is a recipe for disaster in terms of fine tuning the legislation to define the borderline items. Prepared vs. fresh food, healthy vs. unhealthy and essential vs. luxury are all open to argument and the lawyers will be the biggest beneficiaries of any such system.

On overseas examples the costs (including day to day segregation of products) are greater than the tax burden that customers will receive as those extra costs will just be passed down the retail chain to the end consumer.

[Oh_hunnihunni]

Works in Oz I believe...

Btw, I am a single person household. I would save around $6 a fortnight, so $150 odd a year. A bigger household would save a lot more I suspect.

Worth having, if it filtered through.

[SueDonim]

...  making healthy eating choices cheaper compared to the non-healthy choices....

If only it could. Unfortunately that won't happen either. It is already cheaper to buy and prepare unprocessed food but certain sectors of our society just don't do that. And that's across the board from the poorest people lining up at KFC or McDonalds through to apartment dwellers who have no real kitchen because they are expected to use the restaurant below.

[Zurdo]

it isn't necessarily just a cost of living policy though, moreso about making healthy eating choices cheaper compared to the non-healthy choices. So from that POV it is beneficial as a means of promoting healthy eating and presumably reducing costs to society in other areas in the future...

But I agree I don't think this is game changing policy by any means...

Perhaps it was something that should've been done when GST was first introduced...it got slammed on us pretty quick while we were reeling on all the other things being done in those Labour years. A look at low income supermarket trolleys shows what is impacting our health services - they are eating mostly processed food and have lost the art of growing and cooking fresh food. As with everything, we need to look further up the cliff, all sorts of shit is ending up at the bottom.

[Kenj]

We have a system that is admired around the world. Crazy to muck it up for the sake of a few votes. Labour are getting desperate. Trying to get votes for 16 year olds was crazy. Made people realise how worried they are.

[Lilith7]

Works in Oz I believe...

Btw, I am a single person household. I would save around $6 a fortnight, so $150 odd a year. A bigger household would save a lot more I suspect.

Worth having, if it filtered through.

For some people things are now so difficult that even this very slight improvement is going to help; they could however have done better & far sooner. 

The right will not approve obviously.

[harm_less]

Works in Oz I believe...

Btw, I am a single person household. I would save around $6 a fortnight, so $150 odd a year. A bigger household would save a lot more I suspect.

Worth having, if it filtered through.

Worth having a look at their reg's: https://www.ato.gov.au/business/gst/in-d...STfreefood

Scenario - At the fish shop order fresh fish (GST free), order it grilled or crumbed/battered, then pay GST on the preparation costs and whatever ingredients fall foul of the GST free threshold. How about the chips, salad or condiments? Or on that note where do pre-prepared salads fall? Cauliflower vs. bags of individual florrets?

As soon as you put exclusions on any taxation it's just asking for someone to game the system. Messy!

---

We have a system that is admired around the world. Crazy to muck it up for the sake of a few votes. Labour are getting desperate. Trying to get votes for 16 year olds was crazy. Made people realise how worried they are.

In that respect this election could be won or lost on the vote of the youngest, if they can be sufficiently incentivised to bother voting. The Gen Z'ers and Millenials will be most affected by the increasing environmental degradation we are imparting on our planet. For that reason the Greens are well placed to gain votes from the young because they are, or should be, most concerned about the environment.

[Oh_hunnihunni]

The reality is, cheaper fruit and veg would boost purchasing, which would be good for a lot of people, and their health. That would be reflected in health costs for the state...

It's a no brainer really.

[king1]

Works in Oz I believe...

Btw, I am a single person household. I would save around $6 a fortnight, so $150 odd a year. A bigger household would save a lot more I suspect.

Worth having, if it filtered through.

Worth having a look at their reg's: https://www.ato.gov.au/business/gst/in-d...STfreefood

Scenario - At the fish shop order fresh fish (GST free), order it grilled or crumbed/battered, then pay GST on the preparation costs and whatever ingredients fall foul of the GST free threshold. How about the chips, salad or condiments? Or on that note where do pre-prepared salads fall? Cauliflower vs. bags of individual florrets?

As soon as you put exclusions on any taxation it's just asking for someone to game the system. Messy!

yes but just because someone might game the system doesn't seem like a reason to consider not implementing it.

Decisions will have to be made and systems will need to be updated, but I feel like that is going to be a relatively minor factor given the automation involved in most point of sales systems these days.  From a practical POV it has been made to work in Aussie...

[Olive]

The reality is, cheaper fruit and veg would boost purchasing, which would be good for a lot of people, and their health. That would be reflected in health costs for the state...

It's a no brainer really.

Sadly, I think SueDonim is right.  It is already cheaper to buy fresh ingredients and cook them, but vast numbers of shoppers go for processed food because it is easier/they can't cook and don't want to learn/they have a taste for over-salted over-sweetened junk food.

[Kenj]

Say you go into a supermarket and buy a bag of spuds at $4.99. During the next week the law takes effect and GST is taken off veges. You go into the same shop and buy another bag of spuds.

Assuming all things are equal.... Spuds from same farm/crop/supplier.

What do you reckon you will pay for them? Real world replies only please.

[king1]

The reality is, cheaper fruit and veg would boost purchasing, which would be good for a lot of people, and their health. That would be reflected in health costs for the state...

It's a no brainer really.

Sadly, I think SueDonim is right.  It is already cheaper to buy fresh ingredients and cook them, but vast numbers of shoppers go for processed food because it is easier/they can't cook and don't want to learn/they have a taste for over-salted over-sweetened junk food.

although the fact that it is cheaper already isn't really the point, the point is that it will be (in theory) even cheaper still, which in economic theory, increases demand, more people will buy and some will learn to cook I guess.... 

but economics theory will also say that if supply side isn't increased to accommodate the increased demand then the price will rise, so who knows...

[Kenj]

Worth having a look at their reg's: https://www.ato.gov.au/business/gst/in-d...STfreefood

Scenario - At the fish shop order fresh fish (GST free), order it grilled or crumbed/battered, then pay GST on the preparation costs and whatever ingredients fall foul of the GST free threshold. How about the chips, salad or condiments? Or on that note where do pre-prepared salads fall? Cauliflower vs. bags of individual florrets?

As soon as you put exclusions on any taxation it's just asking for someone to game the system. Messy!

yes but just because someone might game the system doesn't seem like a reason to consider not implementing it.

Decisions will have to be made and systems will need to be updated, but I feel like that is going to be a relatively minor factor given the automation involved in most point of sales systems these days.  From a practical POV it has been made to work in Aussie...

Of course, already on Steam Radio there have been mentions of a new Ministry to look after this.

Really??? WTF will that cost?

[Wainuiguy]

The reality is, cheaper fruit and veg would boost purchasing, which would be good for a lot of people, and their health. That would be reflected in health costs for the state...

It's a no brainer really.

So if it is such a "no  brainer" why are almost all tax experts saying it shouldn't happen and will have virtually no impact on the day to day cost of fresh fruit and veges?

[Removed: Rule 2J]

---

Say you go into a supermarket and buy a bag of spuds at $4.99. During the next week the law takes effect and GST is taken off veges. You go into the same shop and buy another bag of spuds.

Assuming all things are equal.... Spuds from same farm/crop/supplier.

What do you reckon you will pay for them?  Real world replies only please.

Because of heavy rain and reduced supply- $6.99.

[Oh_hunnihunni]

The reality is, cheaper fruit and veg would boost purchasing, which would be good for a lot of people, and their health. That would be reflected in health costs for the state...

It's a no brainer really.

Sadly, I think SueDonim is right.  It is already cheaper to buy fresh ingredients and cook them, but vast numbers of shoppers go for processed food because it is easier/they can't cook and don't want to learn/they have a taste for over-salted over-sweetened junk food.

And that is an education issue, not a cost one. It's like the idiots who buy bottled water instead of a filter system. Some people will just not be changed. But lots will, especially if we educate, starting in schools. And the trend towards plant based foods is not going away...

---

The reality is, cheaper fruit and veg would boost purchasing, which would be good for a lot of people, and their health. That would be reflected in health costs for the state...

It's a no brainer really.

So if it is such a "no  brainer" why are almost all tax experts saying it shouldn't happen and will have virtually no impact on the day to day cost of fresh fruit and veges?

[Removed: Rule 2J]

---

Say you go into a supermarket and buy a bag of spuds at $4.99. During the next week the law takes effect and GST is taken off veges. You go into the same shop and buy another bag of spuds.

Assuming all things are equal.... Spuds from same farm/crop/supplier.

What do you reckon you will pay for them?  Real world replies only please.

Because of heavy rain and reduced supply- $6.99.

Can't answer that, rarely buy bags of spuds. Occasionally buy a single one, but really I prefer kumara...

[Wainuiguy]

Sadly, I think SueDonim is right.  It is already cheaper to buy fresh ingredients and cook them, but vast numbers of shoppers go for processed food because it is easier/they can't cook and don't want to learn/they have a taste for over-salted over-sweetened junk food.

And that is an education issue, not a cost one. It's like the idiots who buy bottled water instead of a filter system. Some people will just not be changed. But lots will, especially if we educate, starting in schools. And the trend towards plant based foods is not going away...

---

So if it is such a "no  brainer" why are almost all tax experts saying it shouldn't happen and will have virtually no impact on the day to day cost of fresh fruit and veges?

[Removed: Rule 2J]

---

Because of heavy rain and reduced supply- $6.99.

Can't answer that, rarely buy bags of spuds. Occasionally buy a single one, but really I prefer kumara...

So if this week kumera were $4.99 a kilo, then next week GST comes off.  You go back to the same supermarket but rather than $4.24 (the price it should be after GST is removed)  the kumera are $5.49 a kg.  Did you save the GST?

[harm_less]

And that is an education issue, not a cost one. It's like the idiots who buy bottled water instead of a filter system. Some people will just not be changed. But lots will, especially if we educate, starting in schools. And the trend towards plant based foods is not going away...

---

Can't answer that, rarely buy bags of spuds. Occasionally buy a single one, but really I prefer kumara...

So if this week kumera were $4.99 a kilo, then next week GST comes off.  You go back to the same supermarket but rather than $4.24 (the price it should be after GST is removed)  the kumera are $5.49 a kg.  Did you save the GST?

That example says far more about the domination of the big supermarkets and their marketing methods than it does about products' GST content. Also worth noting that the fresh produce department of any supermarket is the most heavily manipulated for marketing purposes. Even wondered why the fruit and vege department is always the first one you encounter on entering a supermarket? This is because it is the product sector that is most difficult to differentiate from in regard to the competing retailers.

A can of beans, bag of sugar or litre of milk are all identical between stores but not so with a head of broccoli or hand of bananas. Size, freshness, appearance, smell are all far more subjective than for most other items so these qualities can be magnified (or disquised) to advantage, and also those considered as staples such as potatoes are often used as loss leaders.