POLITICS

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Thursday 2 October 2008, 6:37PM
By Hone Harawira
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Maori Party MP Hone Harawira goes on a chop GST shop at Pak N Save in Henderson.
Thursday 2 October 2008

The Maori Party will receive a petition at noon tomorrow to chop GST from food, in the midst of a rising tide of poverty.
More than 20,000 people throughout the country have signed the petition organised by the Auckland-based Residents Action Movement which will be received on Parliament steps by Harawira on behalf of the party.

The Issue
The logic for such a policy has become even more apparent with the rising tide of poverty and 80% of New Zealanders thought the Government should consider lowering tax on food.
The cost of food has rocketed, with bread, vegetables and dairy products being the sharpest hit. Families have suffered price hikes of 89.4% for butter; 19.6% for bread; 59.3% for cheddar cheese; and 10.2% for milk – core items.
ANZ chief economist Cameron Bagrie has warned that the long-term trend for food prices was to rise and rise. The national food bill rose from $13.3 billion in June 2007 to an estimated $14.6 billion in June 2008.

Political opposition has been disappointing
Dr Cullen and John Key have put the GST off food in the too hard basket.
Green MP Sue Bradford said poor people needed an income increase rather than simplistic solutions.
The government says this would make the tax system too complex, but that argument hasn’t stopped them granting all sorts of exemptions from the Emissions Trading Scheme.

Widespread public support
Yet support has been widespread from Greypower, nutritionists, the National Heart Foundation, the Public Health Association, to act immediately against the rising food prices.
Massey University's Dr Emma Dresler-Hawke and Otago University’s Professor Jim Mann have both come out with independent studies, concluding that if Government wants to make healthy food choices affordable, they must give serious consideration to removing the GST off food
The Maori Party particularly support GST being removed from the nutritious basics of the New Zealand diet – fruit, vegetables, milk.
Massey University research found a household of four needs to spend between $31 and $59 a week on the cheapest fruit and veges to meet the recommended target of eating at least five portions a day. Kiwi households spent an average of just $5.90 a week on fruit and $8 on veges.

Costs
GST off all dairy products, fresh fruit and vegetables is $302m.
GST off all uncooked food is $871m. (all food excluding cooked meats, prepared meals, restaurant meals, ready to eat foods, frozen and dried fruit and vegetables).
GST off all food is $1,267 billion. (all food and non-alcoholic beverages).

International scene
Across the Tasman, Australia taxes luxuries (biscuits, icecream, fizzy drinks, takeaways) while exempting basic food. Australia does not charge GST on a wide range of foods, including fresh fruits and vegetables, milk and meat. The exemption of food from the GST only extends to basic food, and does not extend to the preparation of food, such as fast-food.
Britain and Ireland exempt most food; while only two other countries in the OECD tax food like us, at the same rate as other goods (Japan, Denmark).

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