Nash Stuart: General Debate 
Nash Stuart: General Debate 
[Volume:662;Page:10764] 
STUART NASH (Labour) 
: 
 What a rewrite of history that was. I think the previous speaker Paul Hutchison is mixed up with Muldoon. At the end of the Muldoon era we were in such trouble that public servants had to go out and put stuff on their credit cards we were so hard up. As for Ruth Richardson—goodness me! It took until New Zealand had a Labour Government to get unemployment down to the level it was at previously. What a rewrite of history. 
I would like to start with a very short quiz. Who said: “National is not going to raise GST.”? 
Hon Trevor Mallard 
: John Key. 
STUART NASH 
: Right; it was John Key. The people of New Zealand voted for no increase in GST because this is what John Key explicitly told them: “National is not going to raise GST.” Mr Key and Mr English are National members and they are going to raise GST. It annoys the hell out of New Zealanders that these senior politicians could be so disingenuous as to promise one thing and deliver another. The Prime Minister promised no GST increases yet New Zealanders will get them. That is simply not fair. That is called a broken promise. My question is: why would we raise GST? That is a rhetorical question because there is no right answer. 
Let me give members the facts. Mr Key and Mr English have said that New Zealand taxes consumption at a relatively low rate. The coverage of our GST system is comprehensive from avocados to zinc and everything in between. As a result New Zealand has the sixth-highest level of general consumption taxation as a proportion of GST out of the 30 OECD countries. The OECD stated in its 2000 edition of revenue statistics: “There has not been any general trend in OECD countries from direct to indirect taxation. Over the past forty years the general trend away from indirect taxes has been so strong that only six countries—Luxembourg Mexico the Netherlands New Zealand Poland and the Slovak Republic—escaped it.” In fact only Iceland Ireland Portugal and the Slovak Republic had a higher percentage of the total tax take from consumption taxes. We have a comprehensive GST system. I ask the Maori Party members whether they will support a Budget and a Government that increases the rate of GST when they have a member’s bill proposing to cut GST on food. Where does the Maori Party stand on the issue of a general increase in GST? I say to Rahui Katene to stand by her principles and to not support this Budget of broken promises. 
I would like to ask Mr Key and Mr English whether they have read the research from a conservative UK thinktank that found that increases in consumption tax like GST would be more damaging to economic growth than increases in base income tax. I would also like to ask the Minister of Finance what he will say to the 19 percent of small to medium sized enterprises surveyed by the  
New Zealand Herald  
who believe that any increase in GST will seriously reduce sales while another 41 percent think it will have a minor impact; that is 60 percent of businesses polled by the  
New Zealand Herald  
believe that an increase in GST will hurt their business. Of those companies just over 56 percent of them were opposed to any increase in GST and of those 32 percent were strongly opposed to an increase in GST. Not only are the people of this country opposed to an increase in GST but also over half the businesses are too. 
In another scary piece of information for Kiwis the polling went on to state: “While all firms plan to review their prices 34.9 per cent envisage an increase of more than the GST increase of 2.5 per cent and 10.8 percent plan an increase of more than 5 per cent.” Mark my words: if the Government thought that this would be a nice and simple transition it is being naive. What will the Government do to ensure New Zealanders are not ripped off? I will tell members what—nothing. Do members know why? It is because unless someone earns above the top marginal tax rate the Government does not care. We have seen that proven in the House today when the Government said that it would not back Darien Fenton’s redundancy bill. That is the law in Australia. We keep comparing ourselves with Australia. Well if we want to compare ourselves with Australia then the Government should back Ms Fenton’s bill.