Opposition blames GST delay on inflation

Press, 31 August 1985, Page 22

Opposition blames GST delay on inflation

PA Wellington The Government had delayed the introduction of the goods and services tax and accompanying income tax cuts because of the high rate of inflation, said the Opposition finance spokesman on revenue, Mr Michael Cox. The Government could not introduce GST, which would increase prices more than 6 per cent, when inflation was already running at nearly 17 per cent.

An Associate Minister of Finance, Mr Prebble. has blamed the Opposition for delaying by six months the introduction of tax cuts linked to GST.

The Government’s original timetable for the introduction of GST and tax cuts had been April 1 next year, Mr Prebble said, but'that

was no longer a practical date because the Opposition said it would oppose GST clause by clause when it went through Parliament. Mr Cox challenged the Government to introduce an Income Tax Amendment Bill, bringing in tax cuts, when Parliament resumes sitting next month.

Mr Cox said such a bill would have the complete co-operation of the Opposition and it would go through Parliament so quickly “it would never touch the floor.” Introduction of tax cuts from December 1 would allow the Inland Revenue Department to do the administrative work for GST.

The impact on the Government’s deficit of spending over income would be minimal.

“There is probably sufficient fiscal drag to soak up such an impact. To tie these tax cuts with the introduction of GST is arrogant nonsense,” Mr Cox said.