Friday, May 01, 2009

The other dimension’s newspaper

I’m not a fan of the New Zealand Herald. The archives of this blog have plenty of posts where I’ve criticised the Herald for a stupid article, bad journalism or just its rightwing, pro-National Party bias.

Today the Herald published an editorial that was so astonishingly stupid, so breathtakingly boneheaded that I almost thought it came from an alternate dimension. Sadly, it doesn’t.

Their editorial was intended to talk about how the National-led Government could get out of the financial problems caused by the global recession. They suggested the government could delay the next round of personal tax cuts, for example.

I knew that they were heading into rightwing territory when they criticised “the over-reliance of the tax system on company profits and personal income, particularly of the richest 10 per cent.” So what’s the Herald’s solution? Why, raise GST, of course!

“Raising it from the present 12.5 per cent to 15 per cent would bring it into line with Britain's consumption tax.” And why is that a good thing? They don’t say—if the Brits do it, is it automatically good?

They admit, “Inevitably, since sales taxes are paid by everyone, the Government would be accused of taking from the poor to finance income tax cuts for the rich.” That would be because it would be! They also admit, “an added tax on spending might be seen as a drag on any recovery from the recession.” Bingo!

The Herald knows best: “Its impact on prices would be no worse than the public routinely absorbs from the likes of oil price movements.” I’ll freely admit that when I read that line the first thing that popped into my head was “Are they fuckin’ serious?!!

The Herald may not be able to understand how normal people live, but GST is the most regressive form of tax there is, hurting poor and working people far more than the rich. If GST is raised, ordinary people will cut back on spending, making the recession last longer. They’ll cut back on essentials like food, dropping fresh fruit and vegetables grown in New Zealand for cheaper imported things—that’s when they’re not dropping real food altogether in favour of cheaper, filling junk food.

In this recession, people are hurting badly, and the Herald’s solution is to make ordinary people hurt even more. Un-be-lieve-able! Tax the poor more so the rich can live better—yeah, great idea. Fortunately, the National Party isn’t stupid enough to do as the Herald wants and raise GST—it would be the quickest and surest way to lose the next election.

Newspapers all over the world are failing. Can I nominate the New Zealand Herald to be next? Either that, or maybe it can be sold to New Zealanders. Having a major New Zealand paper actually owned by New Zealanders would be refreshing—and maybe they wouldn’t say something so stupid.


d said...

Raising the GST rate is ridiulous for many reasons, but comparing it to the UK rate is beyond ridiculous! Even though NZ is still under the "Crown", GST/VAT rates tend to be regionalized.

Europe has the highest rates - Norway, Sweden etc are in the 20-25% range, while Germany is around 16%. The VAT in the UK used to b 17.5%, so it actualy has been lowered in the past 2 years to 15%.

Asia is much much lower - often only 5%, and usually not higher than 10%. Australia's rate (which should be our best comparison) is 10%.

If anything, GST should be lowered while the top income tax rate in NZ should stay the same. What makes me crazy is that ACC caps out on wages over $106k. Recently, my company gave the same bonus amount to all employees, but higher-paid employees actually received MORE (net) because they didn't pay ACC.

And, as you know, the ACC rate has been increased this year, which once again is a tax on all of those who aren't top earners.

Arthur Schenck said...

As I understand it, VAT in Britain is also completely different—tax is based on the value added, as opposed to GST's flatter structure. IN any case, you're absolutely right on two things in particular: GST should be cut, not raised, and that Australia is our comparison, not far off and irrelevant (to our economy) Britain.

In any case, what's clear is the enthusiasm the right—and it's media cheerleader, the NZ Herald—has for taxing ordinary people to pay for the wealth of the rich.