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	<title>Comments on: Petty politics &#8211; poverty comes from the rich!</title>
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	<description>Random transport, cricket and politics in NZ</description>
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		<title>By: squaredrive</title>
		<link>http://squaredrive.wordpress.com/2008/04/29/petty-politics-poverty-comes-from-the-rich/#comment-52</link>
		<dc:creator>squaredrive</dc:creator>
		<pubDate>Tue, 29 Apr 2008 04:02:42 +0000</pubDate>
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		<description>Back and forth - No Right Turn has now &lt;a href=&quot;http://norightturn.blogspot.com/2008/04/gst-food-and-child-poverty.html&quot; rel=&quot;nofollow&quot;&gt;posted on this issue&lt;/a&gt; as well, though tackling it more broadly.

I tend to agree - GST is regressive and should be removed as a whole, not tweaked. For those who remember the introduction of GST and the so-called compensating removal of sales taxes, you will recall most shopkeepers did not fully remove the sales taxes.

Cunning storeowners removed sales taxes initially, but then hiked prices significantly over the next few months, meaning that within a year people were paying the old prices plus GST (then 10%). I suspect the same would happen again - it is near impossible to tell if a price rise on bread a few months after GST is removed (and the store cuts the price by 1/9), is caused by genuine costs increases the store faces, or just greed.

Government should tackle the real inadequacy of incomes - and the single biggest issue there is housing costs (mortgages and rent). Tackle that, and a lot of other costs become manageable.</description>
		<content:encoded><![CDATA[<p>Back and forth &#8211; No Right Turn has now <a href="http://norightturn.blogspot.com/2008/04/gst-food-and-child-poverty.html" rel="nofollow">posted on this issue</a> as well, though tackling it more broadly.</p>
<p>I tend to agree &#8211; GST is regressive and should be removed as a whole, not tweaked. For those who remember the introduction of GST and the so-called compensating removal of sales taxes, you will recall most shopkeepers did not fully remove the sales taxes.</p>
<p>Cunning storeowners removed sales taxes initially, but then hiked prices significantly over the next few months, meaning that within a year people were paying the old prices plus GST (then 10%). I suspect the same would happen again &#8211; it is near impossible to tell if a price rise on bread a few months after GST is removed (and the store cuts the price by 1/9), is caused by genuine costs increases the store faces, or just greed.</p>
<p>Government should tackle the real inadequacy of incomes &#8211; and the single biggest issue there is housing costs (mortgages and rent). Tackle that, and a lot of other costs become manageable.</p>
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