Hard News by Russell Brown

202

Things To Do

It's quite clever on the part of Residents Action Movement to have latched onto the removal of GST from food products as part of its move to launch on the national stage. But the idea itself is completely daft.

Many other countries have chosen not to apply their GST-style taxes to some or all foodstuffs, but that's typically more a nod to social sentiment than practicality, consistency or effectiveness.

Who'd bet against the 12.5% saving on food being at least partially swallowed up by increased margins, or simply more price rises of the kind we're already seeing? The cost, meanwhile, would be both in the simplicity and relative ease of compliance in the system we have, and in more than two billion dollars in government revenue. Critically, such a policy would benefit relatively well-off people who spend more money on food -- that'll be me -- far more than the poor people RAM claims to represent.

The more straightforward solution -- although it may not be any more politically palatable in an election year where the middle class feels it's struggling too -- is to increase the household incomes of the poorest families, both through the device of the minimum wage and, if not raise benefit levels per se, bump up family support payments.

Steve Pierson at the Standard has a more developed line of thinking on the issue.

It's unlikely that Labour will take up all the recommendations of the Child Poverty Action Group. Labour has actually achieved genuine movement on child poverty, and may be feeling it has missed its chance to do more (you may imagine the political furore when benefit increases are followed by what seems like an inevitable rise in unemployment as the year proceeds) but with nearly a quarter of New Zealand children relying on fixed benefits, the future seems to demand that something be done.

Meanwhile, more Wishartery over at Poneke for those of you with an interest in logical gymnastics.

And, finally, Universal Music has kindly provided us with five copies of the new Portishead album to give away. If you'd like to go in the draw, hit "reply" and email me with "Portishead" in the subject line. I'll draw the winners first thing tomorrow morning.

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