Tax Justice media release
1 February 2011

“Increasing GST to 17.5% would make it even harder for ordinary Kiwis to make ends meet,” says Vaughan Gunson, Tax Justice campaign coordinator. “It will be sickening thought to most people.”

“The recommendation of the Savings Working Group to hike GST up again shows there’s an agenda within government to pile more of the tax burden onto grassroots New Zealanders,” says Gunson.

GST is a horrible regressive tax. Low and middle income earners spend all their money each week, while the rich can save their money, invest it, or go on overseas holidays. The wealthy pay less GST as a percentage of their income.

“Increasing GST while lowering the tax paid by the rich and big corporates will increase income inequalities in New Zealand still further.”

“The tax changes of the last 25 years have been all about allowing the rich to grow their wealth, while the rest of us get taxed every which way,” says Gunson. “GST, rates, user charges, petrol taxes, student loans – all these things impact on grassroots people disproportionately.”

Tax Justice was set up to promote solutions that will shift the tax burden off ordinary Kiwis and onto the super-rich.

A petition calling for GST to be removed from food and a tax placed on financial speculation instead has received 25,000 signatures.

“Even by the Savings Working Group’s own terms of reference their recommendations are wrong,” says Gunson. “New Zealanders are  suffering from high debt levels because wages are low and many people are struggling with massive mortgage debt, thanks to the housing bubble encouraged by greedy banks.”

Tax Justice is calling for a Financial Transaction Tax that targets the money flows of financial speculators and banks. This would discourage a damaging economic activity and generate government income which could be used to create jobs for New Zealanders.

For more information and comment, contact

Vaughan Gunson
Tax Justice campaign coordinator
021-0415 082
svpl@xtra.co.nz

Tax Justice media release
23 July 2010

Peter Dunne, Revenue Minister in the National-led government has said “it’s not New Zealand’s policy to have a non-universal GST.”

“This is not true,” says Vaughan Gunson, Tax Justice campaign coordinator. “GST is not applied universally today. The major exemption is for financial services.”

Inland Revenue lists the following financial services as exempted from GST: dealings with money; certain dealings with securities; provision of credit and loans; provision of life insurance; provision of non-deliverable futures contracts and financial options; the payment and collection of interest, principal and dividends; and issuing securities such as stocks and shares.

“The main users of these financial services are rich investors, speculators, banks and other wealthy corporates,” says Gunson.

“Why is it okay for them to get off paying GST, when grassroots people struggling to make ends meet have to pay tax on food?” asks Gunson. “John Key needs to fess up to the people of New Zealand and admit that our tax system has a rotten core.”

“GST on food makes up a big chunk of the government’s tax revenue, but that could easily be replaced by introducing a Financial Transaction Tax (FTT),” says Gunson.

“A small percentage tax on financial transactions would net billions from rich speculators and wealthy corporates, who are today enjoying a free ride from GST,” says Gunson.

The Tax Justice campaign has been launched to promote a doable solution to New Zealand’s unjust tax system.  The focus of our campaign is a petition that calls on parliament to:

1. Remove GST from food; and
2. Tax financial speculation.

“In the last two months we’ve collected 5,000 signatures,” says Gunson. “We’re picking up a lot of anger on the street about the upcoming GST hike, which will stretch the budgets of low-to-middle income people to breaking point,” says Gunson.

“The issue of tax justice for grassroots Kiwis is not going away. We’re confident the campaign is going to get bigger and bigger.”

See Tax Justice media release (18 July): “It’s New Zealand’s tax system that’s unhealthy” says Tax Justice campaign

For more information on the campaign, contact:

Vaughan Gunson
Tax Justice campaign coordinator
(09)433 8897
021-0415 082
svpl@xtra.co.nz

Victor Billot
Tax Justice media spokesperson
021-482 219
victor@victorbillot.com

by Vaughan Gunson
Tax Justice campaign coordinator
10 June 2010

On 1st October a long black cloud is going to descend on the lives of grassroots New Zealanders. GST will increase from 12.5% to 15%, making everything more expensive. The new rate puts New Zealand in the top bracket of countries with equivalent taxes on goods and services (see http://en.wikipedia.org/wiki/Value_added_tax).

On the same day, the National government’s other tax changes will come into place, including across-the-board lowering of income tax rates.

For low-to-middle income people the small improvements in take home pay resulting from the tax cuts will be mostly wiped out by the increase in GST on food, electricity, clothing, rates charges, and other items that must be accounted for in weekly budgets. As has been widely reported, it’s the rich and wealthy corporates who get the most out of the tax cuts.

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