GST details tipped for early release

Press, 25 July 1985, Page 4

GST details tipped for early release

By

MICHAEL HANNAH

in Wellington

An indication that the Government will announce details of its tax package next month, rather than in September, has surprised employer and union negotiators. Their reaction yesterday confirms that an August announcement of the rate of goods and services tax and accompanying income tax cuts would be aimed directly at influencing the mood of the Labour Party’s annual conference. The conference will be held in Christchuch from August 30 to September 2. Parties to the tripartite wage talks said that they had always thought the tax package would be announced in September, after the wage talks end by August 18. The Minister of Finance, Mr Douglas, said on Tuesday, however, that he would announce some GST details next month. The implications of an August announcement are

minimal for the wage talks, according to both employer and union representatives. Mr Bill Poole, economist for the Employers’ Federation, said the parties had believed that the details of the tax package would be intimated to the participants in the tripartite talks, but the specific details would be announced in September. The GST package would not affect the impending wage round, as tax changes were not due to apply until October 1, 1986, that is, beyond the scope of the round. Other announcements, such as the size of tax cuts promised for next April and any changes to business tax could, however, affect the round, Mr Poole said. Mr Douglas had told the parties that he did not expect the changes to make any significant difference to the tripartite talks, he said. Mr Ron Burgess, chairman of the Combined State Unions, said that the timing had always been expected

to allow the tripartite talks to end by August 18, then the private sector unions to lodge their wage claims, and after that, the tax Budget details to be announced. Wage settlements would then follow the tax package announcement. “If he were to announce the details in late August, I could not see that that would affect us at all,” Mr Burgess said. “It would not concern us, so long as it was after the tripartite wage talks.” The implications of an August announcement, then, appear to be restricted to influencing the Labour Party annual conference. Regional conferences showed increasing opposition to GST earlier this year, and a repeat of the internal debate on the tax is expected to dominate the annual conference also. The Prime Minister, Mr Lange, has refused to divulge details of the tax cuts or the GST rate until they can be presented to the best advantage.

The timing of the tax announcement, if linked with the introduction of GST legislation, is also restricted by a new timetable Parliament is expected to adopt this week. The timetable will mean Parliament will sit for only three days of the week, removing the present Friday sitting. It will also allow members two weeks recess between August 22 and September 10, coinciding with school holidays. Parliament will not sit between July 27 and August 5, but will resume on August 6. This is in keeping with the Government’s policy of having sittings for three weeks, followed by a week in recess. So GST legislation, and perhaps the tax package as well, would be introduced between August 6 and 22. Such a timetable would also limit the time available for Parliamentary debate of the tax package before the Labour Party conference at the end of the month.