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Critics miss point in GST and rates debate

Friday, 23 July, 2004

Critics miss point in GST and rates debate

Critics of United Future's proposal to remove GST on rates have missed the point, according to the party's revenue spokesperson Gordon Copeland.

"The point is that GST should never have been applied to rates in the first place because it is a tax on a tax.

"On the very day my bill to remove GST on rates was drawn from the ballot, as Deputy Chair of Parliament's Finance and Expenditure Committee I was meeting with the Australian Parliament's Committee on Economics, Finance And Public Administration and we were talking about taxes and rates. I asked whether GST was applied to rates in Australia and quickly received the answer "No - because that would amount to a tax on a tax."

"That is the simple point at issue here. If anyone wants to argue that rates are not a tax I say let them speak to, for example, the elderly woman in Takapuna who although housebound faces an annual tax bill of more that $6,000.

"Let them speak to the business community in New Zealand who are very concerned that they are bearing a disproportionate share of rates.

"Let them speak to farmers round the country who say that their rates are manifestly excessive.

"In all of these circumstances those involved are saying that their rates bear no relation whatever to the services provided to them by the local authorities. In other words, they are a tax.

"It is incumbent therefore on the opponents of my bill to come with an argument as to why central government should levy a tax (the GST) on a tax (rates) levied by local authorities. They won't be able to do that because clearly this is wrong in principle as has been recognised, not only by the Australians but also by the Canadians. There is no way you can justify the unjustifiable."


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