Monday, September 27, 2010

Up GST day is Friday

Those who live in NZ and plan to buy "big ticket" items only have 3 days left before the Government takes more from them for doing so. On 1 October prices of virtually everything go up in theory by 2.22%.

We say "in theory" because a lot of businesses who currently round small-priced things to the nearest whole dollar or the nearest five dollars (like restaurants, publishers, 2 Dollar shops) may decide to absorb the increase themselves rather than add an odd number of cents onto the price, particularly if they are in a competitive environment. Thus for these people the increase in GST is effectively an increased tax on their earnings, despite what Finance Minister Bill English may say. Gee thanks, Bill - life as a small business-person is tough enough now, without this.

The Labour Party, meanwhile, says that it will remove GST completely on fresh fruit and vegetables, but won't commit itself to lowering GST back to where it is now. This removal on fruit and vegetables will cost an estimated $250 million in revenue, which it says it will save from cuts in the health system. We think it could much better save this amount by cutting Public Servant positions and salaries. Bureaucrats and consultants did very well out of Helengrad, much of which went out of the country. We don't need the dimwits in Government Departments - particularly the dimwits in Treasury who were probably responsible for this - getting rid of them would probably save a lot more than $250 million.

No comments: