Socred would scrap GST

Press, 2 May 1985, Page 1

Socred would scrap GST

by

PATRICIA HERBERT

in Wellington

Social Credit yesterday became the only Opposition party to pledge that it would remove the superannuation surcharge and scrap the goods and services tax. The announcement was made by the party’s leader, Mr Beetham, who instead advocated a transfer tax which, he said, would provide the same revenue as GST without any of its disadvantages and would fund the restoration of national superannuation to its former status. He said that this and other measures outlined in Social Credit’s alternative “Budget” offered the only option to Labour’s mismanagement. The New Zealand Party’s policies on the economy had been taken over by the Government while the National Opposition was "so on side with Labour in the key economic areas” that it was left with nothing but “nit-picking negativity in the political arena to fall back on.” Much to the disgust of its former leader, Sir Robert Muldoon, the party had failed to announce any intention of removing the superannuation surtax, Mr Beetham said. This failure must lead to the suspicion that it would allow that "pernicious piece of legislation” to stay in place. The same applied to GST, Mr Beetham said. Certainly it is true that

National favours a move from direct to indirect taxation. The Leader of the Opposition, Mr McLay, said as much in a recent address in Christchurch. He also said that the basic principle of taxing spending rather than earning would have widespread support. The criticisms he directed against GST as proposed were the collection costs, the impost it would place on the business community, and the “poverty trap” into which it would push many low-income and middle-in-come earners. This last point rested on the assumption that the Government could not deliver the income tax cuts it has promised and that additional benefits will be needed to compensate those at the bottom of the scale for the price increases GST will generate. Implicit in Mr McLay’s analysis, however, is that he will not dismantle the tax when next in office. Minor amendments are probably the most the public can expect. Mr Beetham said National was sustained at •this stage by nothing more substantial than a traditional voting pattern and growing dissatisfaction with Labour’s performance. He was contemptuous of Mr McLay’s effort in Christchurch.

“In his first major speech on the economy, Mr McLay has engaged in nothing but vague generalisations and

failed to give us any specific policies," Mr Beelham said. The Minister of Finance. Mr Douglas, was equally dismissive, saying that he was amazed at the continuing determination of Mr McLay to keep the National Party living in "cloudcuckoo land." He accused Mr McLay of hiding behind a fog of generalities and dodging all the hard, realistic questions about management of the economy. Mr Douglas took particular issue with what he saw as an attempt by Mr McLay to sheet home all responsibility for New Zealand's economic stringencies to the Labour Government and its policies of the last nine months. “Mr McLay says he is not interested in looking at the past — but the problems any New Zealand Government now faces have been created by the past. They cannot be solved by turning a blind eye.” Mr Douglas said. "Mr McLay needs to face up to why our growth rate was eighty-third out of 107 countries through the 1960 s and why it then slipped back to ninety-first out of 105 countries in the 1970 s and early 1980 s. “It is futile for Mr McLay to go on pretending that the economy was in good progressive heart until last July or that all he needs to fix are the problems created by Labour since that date,” Mr Douglas said.