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John MacDonald: I'm happy to pay GST - but not on this

Author
九一星空无限talk ZB,
Publish Date
Mon, 3 Oct 2022, 1:17pm
Photo / File
Photo / File

John MacDonald: I'm happy to pay GST - but not on this

Author
九一星空无限talk ZB,
Publish Date
Mon, 3 Oct 2022, 1:17pm

Over the weekend, there was an anniversary that I鈥檓 picking most people didn鈥檛 know about and certainly didn鈥檛 celebrate.

On Saturday, GST turned 36.

For 36 years, we鈥檝e been paying that little bit extra on pretty much everything we buy. It started off as 10 percent extra when Roger Douglas kicked it off on the 1st of October 1986, and there鈥檝e been increases along the way to get us to the 15 percent we pay now.

And it鈥檚 probably coincidental that GST is in the news today. This time it鈥檚 GST on the Government鈥檚 new unemployment insurance scheme.

I heard a tax expert on 九一星空无限talk ZB this morning and, after a while, my eyes started glazing over because tax experts being tax experts, they do get bogged down in the detail pretty quickly, don鈥檛 they?

But the gist, so to speak, of what he was talking about, is the advice from Treasury to the Government that it shouldn鈥檛 go giving us taxpayers any deduction on the GST that we will pay as part of our compulsory payments into the new unemployment insurance scheme.

You probably know about it - it鈥檚 where workers will pay into it and employers will pay into it too. And, once it鈥檚 up and running, if you lose your job through redundancy the Government will pay you 80 percent of what you were earning for up to seven months.

And, just like what happens with ACC, employees will have money deducted from their pay for the scheme and employers will have to pay into it as well through levies.

But, unlike employers who will be able to claim back the GST they pay into the insurance scheme, their workers won鈥檛. And I think this is wrong.

If you go to the IRD website, here鈥檚 what it says about GST: 鈥淕ST is a tax added to the price of most goods and services, including imports. It is a tax for people who buy and sell goods and services.鈥

A tax for people who buy and sell goods and services. But it's the buying bit that鈥檚 key here.

Because, generally, when you buy something you choose whether you鈥檙e going to do it or not, don鈥檛 you?

Even stuff you absolutely need, there鈥檚 still an element of choice there. If something breaks down, you can choose whether you鈥檙e going to get it fixed or not.

Food - we all need food. But there are a whole lot of choices available to us. We don鈥檛 have to buy everything - we can grow vegetables, if we choose to.

Life insurance and medical insurance - we鈥檝e got a choice.

What we don鈥檛 get to choose, though, is whether we鈥檙e going to contribute to the Government鈥檚 new unemployment insurance scheme. It鈥檚 going to be compulsory, whether we like it or not.

And that鈥檚 why I don鈥檛 agree with Treasury and that鈥檚 why I don鈥檛 think we should be made to pay GST on the levies that are going to go straight out of our pay packets whether we like it or not.

The National Party also thinks that adding GST to the levies is outrageous.

Its Finance spokesperson Nicola Willis is describing it as 鈥測et another grab on Kiwis鈥 take-home pay by Labour, intended to boost the Government鈥檚 coffers at the expense of workers.

And she goes on to say: 鈥淚n the middle of a cost of living crisis, this is completely the wrong thing for the Government to be doing.鈥

And I couldn鈥檛 agree more.

Although, I鈥檓 coming at it from the perspective that this is not going to be optional - there鈥檚 no choice involved here - and so why should we be paying GST?

Because, as far as I鈥檓 concerned, buying something comes from a conscious decision to pay money in exchange for it. That鈥檚 why I鈥檝e got no qualms about paying GST on my groceries and clothes and shoes and holidays鈥ll things that I choose to spend my money on.

But when this new insurance scheme comes in, I鈥檒l have no choice. I鈥檒l be paying for the scheme - but I won鈥檛 be buying it. That鈥檚 why I think there is no way we should be paying GST on it.

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