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In a speech to Labour
supporters and business representatives in Nelson yesterday, Mr Goff hinted at
the "broad direction" of Labour Party policies ahead of National's mid-term
Budget next Thursday.
Mr Goff gave strong indications at where Labour is headed, but also left the
door open in areas for the party to change its mind.
Before yesterday's speech, Mr Goff indicated Labour was considering taking GST
off some food items as National has signalled it intends to raise the tax from
12.5 per cent to 15 per cent next week raising $2 billion.
Mr Goff said yesterday new research from the Wellington School of Medicine
showed taking the tax off fruit and vegetables, worth $200 million a year, had
the effect of getting people to buy healthier foods.
However, he said Labour would need to be convinced that removing GST on those
items would actually make them cheaper before exempting them. "We would need to
be sure it didn't create more red tape than it is worth."
Mr Goff criticised raising GST to 15 per cent saying it would hit small
businesses and hardworking New Zealanders and Kiwi families hardest.
He also warned that if GST went up the real price rise could be well over 2.5
per cent as many retailers would also take the chance to put up the prices of
their goods.
However, he told media after his speech that while Labour was strongly opposed
to the tax increasing it had not ruled out keeping the increase and if National
implemented it Labour would then have to look at its options, he said.
"One option is to take that revenue and fairly compensate middle and low income
people and not just reward the wealthy. I think that might be the most practical
way of doing it, but we are keeping our options open."
He said National had promised to offset the rise in GST by providing tax cuts,
but those only benefited the top earners.
"The highest income earners already got the lion's share from the last round of
tax cuts."
Labour's tax package would be fairer than National's, he said.
This included possibly shifting the highest tax rate of 38 per cent from $70,000
to $100,000, but also rejigging the lower and middle income tax brackets to
provide relief.
Mr Goff also flagged further investigation into a universal KiwiSaver programme.
He also said that Labour would require the Reserve Bank to pursue broader
objectives than having the single policy goal of price stability.
Labour would also restore incentives for innovative companies to invest in
research and development. He cited the collaboration between the Cawthron
Institute, Wakatu Incorporation and Crop and Food Research in aquaculture as a
good example of creativity.
Source:
Nelson Mail,
New Zealand, dated
13/05/2010
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