Commerce Commission Report on Grocery Sector

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#2755893 5-Aug-2021 22:16

tdgeek:
Geektastic:

I suppose whether you think that is beautiful depends upon whether you think taxing food is appropriate.

You could stop tax on food, then GST has to increase to cover that. What about GST on salmon? GST on nappies? They are more important than salmon. It gets very sticky when food is anything from staples to luxuries.

Does anyone eat nappies?

Geektastic

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#2755898 5-Aug-2021 22:21

You could give everyone a $1000 tax free limit in their annual tax return that represented a rebate of GST paid on food.

It wouldn't be exact but it would be a contribution at least.

antonknee

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#2755905 5-Aug-2021 22:35

Geektastic:
tdgeek:

You could stop tax on food, then GST has to increase to cover that. What about GST on salmon? GST on nappies? They are more important than salmon. It gets very sticky when food is anything from staples to luxuries.

Does anyone eat nappies?

I think tdgeek's point was that people often point to removing GST from food as food is a staple that's essential for life, and it would make a difference to cost of living (and for this reason is often thought of as being particularly good for/targeted at poorer families). But salmon (a luxury food) would therefore be GST free, while nappies which are not such a luxury would attract GST. Then you get into debates of should we be making luxury goods cheaper, does it make the system too complicated, etc etc.

In any case, I think GST should stay on everything as it's extremely simple and effective and captures tourists and so on too. Giving cash to poorer families is a better way to help them with cost of living anyway IMO (tax free threshold, your idea of a default $1000 rebate representing food GST etc etc).

tdgeek

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#2755932 6-Aug-2021 07:56

antonknee:

I think tdgeek's point was that people often point to removing GST from food as food is a staple that's essential for life, and it would make a difference to cost of living (and for this reason is often thought of as being particularly good for/targeted at poorer families). But salmon (a luxury food) would therefore be GST free, while nappies which are not such a luxury would attract GST. Then you get into debates of should we be making luxury goods cheaper, does it make the system too complicated, etc etc.

In any case, I think GST should stay on everything as it's extremely simple and effective and captures tourists and so on too. Giving cash to poorer families is a better way to help them with cost of living anyway IMO (tax free threshold, your idea of a default $1000 rebate representing food GST etc etc).

Yes, thanks. Food is a staple, salmon isnt, but nappies could be. In fact there are many essentials that arent food. And what happens when the GST free good is the same price a year later? It might be that the costs rose, or it might be that margins have sneakily been increased. Administering that would be very difficult. Fred has good reasons for GST free these days, Rich also does to avoid that due to input issues. Maybe keep what we have and target the lower income sector. Maybe food stamps for them that only covers staple foods and non food staple grocery items. Thats as easy to manage as the supermarket loyalty credits at checkout

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#2756297 6-Aug-2021 17:18

I think tdgeek's point was that people often point to removing GST from food as food is a staple that's essential for life, and it would make a difference to cost of living (and for this reason is often thought of as being particularly good for/targeted at poorer families). But salmon (a luxury food) would therefore be GST free, while nappies which are not such a luxury would attract GST. Then you get into debates of should we be making luxury goods cheaper, does it make the system too complicated, etc etc.

In any case, I think GST should stay on everything as it's extremely simple and effective and captures tourists and so on too. Giving cash to poorer families is a better way to help them with cost of living anyway IMO (tax free threshold, your idea of a default $1000 rebate representing food GST etc etc).

Ah. Of course everyone needs food and not everyone needs nappies.

Fred99

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#2756327 6-Aug-2021 18:36

tdgeek:

Maybe food stamps for them that only covers staple foods and non food staple grocery items.

yeah - nah.

There's a problem with a lot of welfare as it stigmatises - and then those stereotypes become a self-fulfilling prophesy.

Rocking up to the checkout and paying with foodstamps, Hosking et al will be thrilled to feature any who rock up to the checkout with a trolley containing anything but gruel, fodder grade turnips, and expired best-by budget sausages with the orange discount sticker affixed.

KrazyKid

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#2757367 9-Aug-2021 17:24

Fred99:

tdgeek:

Maybe food stamps for them that only covers staple foods and non food staple grocery items.

yeah - nah.

There's a problem with a lot of welfare as it stigmatises - and then those stereotypes become a self-fulfilling prophesy.

Rocking up to the checkout and paying with foodstamps, Hosking et al will be thrilled to feature any who rock up to the checkout with a trolley containing anything but gruel, fodder grade turnips, and expired best-by budget sausages with the orange discount sticker affixed.

To late - we have had a food stamps like service in NZ for years.
It's an Eftpos like card called a WINZ CARD

You get money you can only use to food and essentials, not booze, lotto tickets, cigarettes etc

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Shop now on Samsung phones, tablets, TVs and more (affiliate link).

JWR

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#2757454 9-Aug-2021 20:55

Geektastic: You could give everyone a $1000 tax free limit in their annual tax return that represented a rebate of GST paid on food.

It wouldn't be exact but it would be a contribution at least.

That's a good idea!

It should achieve what you want and not make the tax system significantly more complicated.

jonherries

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#2757522 9-Aug-2021 21:22

JWR:
Geektastic: You could give everyone a $1000 tax free limit in their annual tax return that represented a rebate of GST paid on food.

It wouldn't be exact but it would be a contribution at least.

That's a good idea!

It should achieve what you want and not make the tax system significantly more complicated.

Uk has this for the first £7500 of income

Jon

JWR

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#2757612 9-Aug-2021 23:36

jonherries:

Uk has this for the first £7500 of income

Jon

.. and Australia have it for tax free on income below $18,000.

The UK and Australia both have a GST and it is far more selectively applied than in NZ.

blackjack17

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#2758557 11-Aug-2021 12:22

Rolled oats woolworths vs countdown

Same brand, same packaging

https://www.woolworths.com.au/shop/productdetails/321222/woolworths-quick-oats

A$1.40 (NZ$1.47)

https://shop.countdown.co.nz/shop/productdetails?stockcode=321222

A$2.19 (NZ$2.30) removing gst takes it to A$1.87 (NZ$1.955).

So that is 50c per 750 gram packet of rolled oats to transport to NZ.

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jonherries

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#2758574 11-Aug-2021 12:55

JWR:
jonherries:

Uk has this for the first £7500 of income

Jon

.. and Australia have it for tax free on income below $18,000.

The UK and Australia both have a GST and it is far more selectively applied than in NZ.

I think the term talked about is how “regressive” taxation is. The logic of doing something about it goes something like:

Lets say basic living costs $20000 per person per year with ~ $2500 in GST (ignore rent in that, am going for round numbers here).

If I earn $50,000 and pay $10,000 in income tax (20%) + $2500 from above my effective tax rate is: 25%
If I earn $100,000 and pay $20000 in income tax (20%) + $2500 from above my effective tax rate is: 22.5%

Now of course we have different tax brackets and you might have more disposable income that lets you spend money and pay more GST, but the math suggests that those closest to the lowest income are likely to have a higher burden of tax than those who earn more.

So tax free brackets and taking GST of things everybody needs (that $20,000) we can ensure that the tax system can be fairer (depending on your values).

In summary I think arguments about the simplicity of tax systems shouldn’t conflate the complexity of managing them with the disadvantage for those who can’t navigate them.

In my view most of those arguments have proved to be false (UK and Australia are good examples) and the IRD is spending plenty of money to make more complex rules easier to administer, so why wouldn’t we consider these.

In that I would the look at how we extend GST exemptions to insulation, double-glazing and was going to say energy (but would want to see better housing at the same time).

Jon

BlueShift

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#2759031 12-Aug-2021 13:30

blackjack17:

Rolled oats woolworths vs countdown

Same brand, same packaging

https://www.woolworths.com.au/shop/productdetails/321222/woolworths-quick-oats

A$1.40 (NZ$1.47)

https://shop.countdown.co.nz/shop/productdetails?stockcode=321222

A$2.19 (NZ$2.30) removing gst takes it to A$1.87 (NZ$1.955).

So that is 50c per 750 gram packet of rolled oats to transport to NZ.

And still cheaper than the ones grown in NZ with no international travel...

https://shop.countdown.co.nz/shop/productdetails?stockcode=266585&name=harraways-rolled-oats

Dratsab

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#2759420 12-Aug-2021 21:26

BlueShift:

blackjack17: Rolled oats woolworths vs countdown

Same brand, same packaging

https://www.woolworths.com.au/shop/productdetails/321222/woolworths-quick-oats

A$1.40 (NZ$1.47)

https://shop.countdown.co.nz/shop/productdetails?stockcode=321222

A$2.19 (NZ$2.30) removing gst takes it to A$1.87 (NZ$1.955).

So that is 50c per 750 gram packet of rolled oats to transport to NZ.

And still cheaper than the ones grown in NZ with no international travel...

https://shop.countdown.co.nz/shop/productdetails?stockcode=266585&name=harraways-rolled-oats

Although that pack's 1.5kg, meaning Harraways is $2.50 per 750g, it's only 20c. But scaled across the country that's quite likely a significant chunk of money. Is this the fault of Harraways or too much ticket clipping on the way through the chain? Kind of like the extra premium prices (more than overseas) we pay for for non export quality meat.

kingdragonfly

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#2784137 25-Sep-2021 13:51

Funny beef / lamb farmers are first to beg for free government money, and also first to say "sucks to be you. that's what we charge"

It's almost like they are an uncaring monopoly.

Stuff: https://www.stuff.co.nz/business/126436508/minced-beef-hits-20-a-kilogram

...Foodstuffs North Island spokeswoman Antoinette Laird says the retail meat price increases are not lockdown related, and it has not increased its prices because of the level 4 lockdown. ...

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