Alliance Party calls for phase out of GST starting with food

The Alliance Party has called for GST on food to be scrapped – and the entire tax to be phased out.

Alliance Party co-leader Kay Murray says “GST on food will have to go now if basic food items are to remain affordable for New Zealanders.”

Ms Murray says that figures from the Council of Trade Unions show food prices rose 6% in the past year and are set to continue to rise this year.

“Removing GST would at least allow some breathing space while other long term measures are put in place to keep food affordable. Australia doesn’t have GST on basic food items. If the Australians can manage it surely we can too.”

Ms Murray says the Alliance has always opposed GST and has long advocated replacing it with a progressive tax system.

“The Alliance would replace GST with a Financial Transaction Tax charged on bank withdrawals at a rate of 2 cents per $100. This would significantly reduce costs for low and middle income earners. For example a family who spent $200 on food would pay only 4 cents Financial Transaction Tax when the money was withdrawn from their bank account whereas at the moment they would pay an extra $25 in GST. ”

The Alliance says this is a much fairer way of obtaining revenue, says Ms Murray.

“It is also a much more straightforward system of collection. The financial institutions would collect the tax when a withdrawal is made rather than businesses having to add it on to the cost of each item for sale.”

For further information, contact Alliance Party co-leader Kay Murray on 0211672843

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