VALLEY ACTION NETWORK
GST Policy

Authorised by Grant Brookes, 51 Awamutu Grove, Lower Hutt

No GST on rates - a tax on a tax is robbery

GST is an unfair tax. It falls more heavily on the people at the grassroots who have to spend their income each week on goods and services to survive.

Raising GST from 12.5 percent to 15 percent on October 1 makes it even more unfair. Adding it on top of rates is simply robbery.

Over the last 25 years, grassroots New Zealanders have gone backwards. GST has been a key part of this shift. Social security – with a decent health and education system available to all, and a safety net for those who needed it – is becoming a distant memory.

For the grassroots majority today there is growing insecurity. It's as if we don't count any more. GST was introduced in 1986 and increased to 12.5 percent two years later, allowing the government of the day to cut the top tax rate from 66 percent to 33 percent. These huge tax cuts – the biggest in New Zealand's history – undermined our social security system.

The shifting of the tax burden away from those who could afford it and onto grassroots people is also the main reason why New Zealand has had the fastest growing gap between rich and poor in the OECD group of developed nations.

Groups representing people on fixed incomes, like Grey Power, and organisations advocating for social justice such as the National Council of Women have been unwavering in their demand that GST should not be charged on rates. Even the Labour Party, which gave us GST and supported it for 25 years, has called for the GST rise not to be applied to rates this year. "Bills are getting harder to pay and we believe this will help ease pressures on families", said Labour leader Phil Goff.

Taking GST off rates is simple. It's already done elsewhere. There's no GST charged on council rates in Australia, for example, or in England, or in many other countries. VAN believes that it's time to heed the words of the decorated six-term Mayor of Waitakere City, Bob Harvey QSO. "Rates are a tax for goods and services delivered by local government", he said. "That's fair enough. But for the Government to charge GST on top of that is just not on."

Harvey has called on councils to band together to defy the government and stop collecting GST on rates. If councils don't collect it, then the government can't have it. If it's good enough for New Zealand's most distinguished mayor, then it's good enough for us. Hutt residents deserve councillors with the backbone to say, "a tax on a tax is robbery".

If elected, VAN - Valley Action Network candidates will:

• Push for Hutt City Council to convene a meeting of local government authorities and representative organisations to organise a nationwide boycott of GST on rates.