FFS leave GST alone Chippy

[Wainuiguy]

I am sure there are also forums out there for those unable to admit they are wrong.  Perhaps you could seek those out?

If you were able to lose the obnoxious attitude you might realise that I was actually agreeing with your opinion. I was just making the conversation more inviting for others. Lighten up sunshine

Geez thanks for finally admitting it in than 600 words.

---

I think the defensiveness of supporters of the right on this topic shows that they are afraid it might increase labour's vote.

I am sure some will think it is an amazing policy that will give them massive financial benefit.  Already a couple in this thread.  They are of course wrong.

[harm_less]

If you were able to lose the obnoxious attitude you might realise that I was actually agreeing with your opinion. I was just making the conversation more inviting for others. Lighten up sunshine

Geez thanks for finally admitting it in than 600 words.

Took you a while to realise it though.

Seems my keyboard isn't alone in getting a thrashing or do you prioritise speed over accuracy?

[king1]

I think the defensiveness of supporters of the right on this topic shows that they are afraid it might increase labour's vote.

I am sure some will think it is an amazing policy that will give them massive financial benefit.  Already a couple in this thread.  They are of course wrong.

No-one thinks this will be a "massive financial benefit" for anyone, it might help some a little maybe, and if you can look beyond the $$ signs it might even have some health benefits...

[Wainuiguy]

Geez thanks for finally admitting it in than 600 words.

Took you a while to realise it though.

Seems my keyboard isn't alone in getting a thrashing or do you prioritise speed over accuracy?

[Removed: Rule 2J]

[Olive]

If you were able to lose the obnoxious attitude you might realise that I was actually agreeing with your opinion. I was just making the conversation more inviting for others. Lighten up sunshine

Exactly.   Well said.   The obnoxious attitude is tiresome and off-putting.

[Lilith7]

If you were able to lose the obnoxious attitude you might realise that I was actually agreeing with your opinion. I was just making the conversation more inviting for others. Lighten up sunshine

Exactly.   Well said.   The obnoxious attitude is tiresome and off-putting.

And it hinders discussion too.

[C_T_Russell]

One thing that GST should be removed from is our property rates.

[harm_less]

One thing that GST should be removed from is our property rates.

That can be justified in that property rates contribute towards services provided by councils. As GST is a Goods & Services Tax

[Oh_hunnihunni]

It is though a tax on a tax, because the rates themselves are a goods and services contribution from the property owners...

[harm_less]

From this morning's Newsroom piece by Jonathan Milne on the F&V GST exemption:

"Already, the Restaurant Association says this policy will likely reduce the operational costs for hospitality businesses. “By eliminating GST from these essential food items, we anticipate a reduction of in the core cost of food for our member businesses," says chief executive Marisa Bidois.

Labour hasn't yet disclosed (or perhaps even considered) whether fruit and veges will be zero-rated all the way through from the farm to the fork, or just when they're finally sold to the consumer. It is likely the benefit to businesses is not in a reduction to their costs, per se, but an improvement to their cashflow."

I had thought about the second point but the hospitality industry wasn't a situation I had considered. I can see this getting messy and as onathan also states:

"Kids, if this is passed, sign up next year for law school – lawyers are gonna have a field day."

[Oh_hunnihunni]

No doubt there will be a dedicated team set up to adjudicate on the crossover items.

[SueDonim]

From this morning's Newsroom piece by Jonathan Milne on the F&V GST exemption:

"Already, the Restaurant Association says this policy will likely reduce the operational costs for hospitality businesses. “By eliminating GST from these essential food items, we anticipate a reduction of in the core cost of food for our member businesses," says chief executive Marisa Bidois.

Labour hasn't yet disclosed (or perhaps even considered) whether fruit and veges will be zero-rated all the way through from the farm to the fork, or just when they're finally sold to the consumer. It is likely the benefit to businesses is not in a reduction to their costs, per se, but an improvement to their cashflow."

I had thought about the second point but the hospitality industry wasn't a situation I had considered. I can see this getting messy and as onathan also states:

"Kids, if this is passed, sign up next year for law school – lawyers are gonna have a field day."

Yes, there will be plenty of messes, but I can't see how anyone could expect it to reduce operational costs for restaurants. Currently they claim the GST paid on purchases (for ingredients) and then pay the final gst on the income from the people who eat the food. If the gst is removed from the fresh produce they purchase, they will have to have computer software upgrades to account for the fact that some of their purchases will be gst-able and some not. That's an expense. Then at the end of the process, they will still pay gst on the income received from the sale of the food. The gst component of their purchases doesn't change - the actual cost is already the gst-exclusive price.

Another mess is that there was an article that said part of the tax plan is to remove the ability for commercial property owners to deduct depreciation. So that means that the supermarket owners will have increased costs - which will need to be passed on to the customers to keep profit margins the same. There goes any chance of consumers actually seeing any benefit from the change in gst.

[Oh_hunnihunni]

Which makes me doubly glad I don't buy fruit and veg from supermarkets.

[Zurdo]

I'm sure Countdown will be moaning about the added increase in costs, and how it will impact the consumer....but spending millions on a rebrand to Woolworths is all fine and dandy.

[Lilith7]

I'm sure Countdown will be moaning about the added increase in costs, and how it will impact the consumer....but spending millions on a rebrand to Woolworths is all fine and dandy.

They're apparently copping a fair bit of flak for that daft idea; & so they should.

[dken31]

At the moment, for >99% of business income and expense transactions, either the whole transactions includes GST or none of it does. This makes the accounting really straight forward as the person preparing the GST return doesn't need to check receipts for most things. E.g. bank fees & interest=noGST; a purchase from Countdown or BP=GST on the full amount (assuming it was a business purchase).

If, however, thus GST change gets through, we're going to have to start reviewing individual receipts to manually enter the specific GST content rather than being able to let the accounting software work it out automatically.

And I'd be hugely suprised if the change reduced produce prices long term. Prices go up and down, and consumers largely just accept it, so their is no real way of knowing if we're getting the benefit or if it is instead being enjoyed by the retailers...and that not being able to know is exactly why I expect the retailers to take the saving themselves.

---

https://www.nzherald.co.nz/nz/new-zealan...ZW2ADSSZE/

As I expected, not one expert had a good word to say about it. The recurring theme was that it was a populist idea banking in the fact that the general public has too poor an understanding of the whole thing to realise it is such a bad idea.

If everyone who actually understands out tax system thinks it is a bad idea and won't actually achieve its intended aim, how can those of you with zero expertise in the matter think that you know better? Sure, most people would like it to be easier for poor people to buy fresh produce, but this just isn't a valid solution.

[Kenj]

At the moment, for >99% of business income and expense transactions, either the whole transactions includes GST or none of it does.  This makes the accounting really straight forward as the person preparing the GST return doesn't need to check receipts for most things. E.g. bank fees & interest=noGST; a purchase from Countdown or BP=GST on the full amount (assuming it was a business purchase).

If, however, thus GST change gets through, we're going to have to start reviewing individual receipts to manually enter the specific GST content rather than being able to let the accounting software work it out automatically.

And I'd be hugely suprised if the change reduced produce prices long term. Prices go up and down, and consumers largely just accept it, so their is no real way of knowing if we're getting the benefit or if it is instead being enjoyed by the retailers...and that not being able to know is exactly why I expect the retailers to take the saving themselves.

---

https://www.nzherald.co.nz/nz/new-zealan...ZW2ADSSZE/

As I expected, not one expert had a good word to say about it.  The recurring theme was that it was a populist idea banking in the fact that the general public has too poor an understanding of the whole thing to realise it is such a bad idea.

If everyone who actually understands out tax system thinks it is a bad idea and won't actually achieve its intended aim, how can those of you with zero expertise in the matter think that you know better? Sure, most people would like it to be easier for poor people to buy fresh produce, but this just isn't a valid solution.

They could have done the "Free beer for the workers" thing. With that, plus the votes for 16 year olds, they might have got a few more votes?

Dopey bloody politicians! It's almost fun seeing them groveling for the extra money that comes with votes.

[Kenj]

At the moment, for >99% of business income and expense transactions, either the whole transactions includes GST or none of it does.  This makes the accounting really straight forward as the person preparing the GST return doesn't need to check receipts for most things. E.g. bank fees & interest=noGST; a purchase from Countdown or BP=GST on the full amount (assuming it was a business purchase).

If, however, thus GST change gets through, we're going to have to start reviewing individual receipts to manually enter the specific GST content rather than being able to let the accounting software work it out automatically.

And I'd be hugely suprised if the change reduced produce prices long term. Prices go up and down, and consumers largely just accept it, so their is no real way of knowing if we're getting the benefit or if it is instead being enjoyed by the retailers...and that not being able to know is exactly why I expect the retailers to take the saving themselves.

---

https://www.nzherald.co.nz/nz/new-zealan...ZW2ADSSZE/

As I expected, not one expert had a good word to say about it.  The recurring theme was that it was a populist idea banking in the fact that the general public has too poor an understanding of the whole thing to realise it is such a bad idea.

If everyone who actually understands out tax system thinks it is a bad idea and won't actually achieve its intended aim, how can those of you with zero expertise in the matter think that you know better? Sure, most people would like it to be easier for poor people to buy fresh produce, but this just isn't a valid solution.

They could have done the "Free beer for the workers" thing. With that, plus the votes for 16 year olds, they might have got a few more votes?

Dopey bloody politicians! It's almost fun seeing them groveling for the extra money that comes with votes.

Just watched Chippy on The AM Show explaining all the carrots that they are dangling in front of the voters. At the end of the interview they asked

Q: Crinkle cut frozen fries. GST or not?

A: Yes because they have Canola oil added to them which makes them processed.

Brings this to mind.....

Every vote is sacred
Every vote is great
If a vote is wasted
Chippy gets quite irate.

With apologies to Monty Python who was talking of the sins of Onan.

[king1]

well the big argument against this policy seems to be that it is going to be too difficult to implement, yet the crinkle cut chips example tends to suggest not, a simple rule applied and a verdict given

For the suppliers and sellers, i don't see this as a major issue...

• yes they will have to update their IT systems and database with an extra tickbox to identify the GST free items in inventory - no big deal, there are only so many systems out there
  
• yes, someone will have to go through and tick that box once GST status is confirmed, presumably by the supplier.  
  
• Yes, accounting systems will have to update there software to allow for the GST free items, but that is simply an added 'feature' so no big deal there, they do it all the time...
  

After that, technology will do all the number crunching and spit out the reports as usual.

It will be a problem for the odd food supplier who still writes manual invoices and sells mixed products, that's about it...

From a implementation POV i see this as a non-event... whether it achieves the expected economic benefits promised is another story

[Olive]

Of course there will be some trivial problems of definitions, but the concept has been intensively traversed and well circulated in other countries, especially Australia, and also, long ago,  the EU.   There are always anomalies and ambiguities, but these do not really affect the purpose of the tax exemption.   Definition arguments are just a distraction.

Henry Cooke has expressed another aspect in his newsletter this morning.  Unfortunately I don't seem to be able to paste it here, but in essence he remarks that the public likes GST exemptions because of the perceived social control; encouraging poor people to eat more fruit and veges.   On the other hand simple cash increases to the poor (which are more effective) invoke the false idea that poor people waste money on pokies and smokes.


like the idea of controlling what poor people spend “taxpayer money” on. The idea that most benefit payments are immediately spent on cigarettes and pokies is very widespread, even if in reality benefits are largely spent on housing and food, the same things everyone else spends their money on.
cash payments rarely win Labour much political clout or column inches, especially if they are targeted through Working For Families, as this weekend’s boost was. That’s because they are usually incredibly complex and only apply to some people. The cash payments which do get attention are generally the universalized or semi-universalised ones: The Wage Subsidy, superannuation, Best Start.
Another problem is that a lot of people like the idea of controlling what poor people spend “taxpayer money” on. The idea that most benefit payments are immediately spent on cigarettes and pokies is very widespread, even if in reality benefits are largely spent on housing and food, the same things everyone else spends their money on.