GST alternative seen as absurd

Press, 5 December 1985, Page 59

GST alternative seen as absurd

PA Auckland The Democratic Party’s proposed transfer tax is absurd, says the Minister of Finance, Mr Douglas. He has said that his office would analyse the idea “to show why it is wrong.” “Quite simply, it is a nonsense. I hardly have any view on it,” Mr Douglas said. An Auckland economist, Dr Don Brash, said Democrats were dreaming if they believed their tax would work. Financial transactions would stop “stone dead" if a transfer tax were applied. Dr Brash, chairman of the Government’s advisory panel on GST, also contested the Democrats’ saying that GST compliance costs were high. He said the party made the error of

comparing it with the British VAT system, when it was radically different. The transfer proposal reflected the Democrats’ “total lack of contact with commercial reality.” To suggest that businesses would help fund a campaign to stop GST in favour of a new tax which hit profits was crazy, Dr Brash said. The chairman of Auckland regional Chamber of Commerce, Mr Geoffrey Clathworthy, said businesses would be wary of any proposal which shifted the tax incidence to the corporate sector. “We need to look at the details carefully to see what the implications are for business,” he said. Earlier report, page 2