NZMEA Backs Call to Reduce GST on Food

Media Release, 24 April 2008

NZMEA Backs Call to Reduce GST on Food

The New Zealand Manufacturers and Exporters Association (NZMEA), says that with world food prices increasing, it would support the removal of the GST on key food items as a focused and sensible alternative to personal tax cuts.

“Currently, with the housing market slowing down, petrol pushing record highs, and Statistics NZ reporting a 3.4 percent increase in CPI for the year; with grocery prices up 3.6% in the March 2008 quarter alone, the ‘no change’ OCR announcement was anticipated”, says Chief Executive John Walley.

This Association is still picking August as the timing for the first cut in the OCR. However the Government should be clear about resiling from the commitment to personal tax cuts, and as a result give the RBNZ more headroom for an earlier OCR reduction.

The “maybe” of personal tax cuts is doing real damage right now; it needs to be clear, even if it is election year.

“Given the widespread slow down in the economy, the Government and RBNZ are second guessing each other; tax cuts should be explicitly abandoned until conditions improve".

NZMEA – the authentic and independent voice for manufacturers and exporters.

ENDS

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