The regressive GST increase being implemented by the National Government would not be reversed by a Green Party government. That’s the message found in the Greens’ new alternative budget released this week. Despite its posturing over issues of inequality the party’s pro-GST stance shows that the Greens are no enemy of inequality. The Green Party used to campaign on getting rid of GST. Now it accepts the increased 15% rate of GST, and doesn’t even advocate the mildly-leftwing demand of exempting food from the tax. [Read more below]
Of course opposition political parties like the Greens and Labour have been inclined to disingenuously campaign against the rise of the GST rate, despite indicating that if they got into government and thus had the chance to reverse the GST shift they clearly wouldn’t.
For example, last year co-leader Russel Norman said that ‘Any moves to raise GST would hammer those in the lower and middle income brackets’. And this year in her ‘State of the Planet 2010’ speech, co-leader Metiria Turei, said the following:
The Greens will not support any package that includes cuts to the top levels of income tax or any increase in GST because these changes would exacerbate the differences between the rich and poor in our society. Let me make that clear. The Greens are opposed to cuts in the top levels of income tax. We are opposed to any increase in GST.
Yet the Greens new alternative budget explicitly accepts the rise of GST and there is no proposal to reverse it. The package states that its economic calculations have been made ‘assuming GST is increased to 15 percent and stays there’ (p.22). This makes the Greens just as duplicitous and disingenuous as Labour for campaigning against the tax while planning to retain it. Being critical of the rise in GST means nothing if you don’t actually advocate a return to 12.5% and then factor in the cost of that reverse.
The Greens’ Mild the Gap package which is dressed up to suggest a Green Government would reduce inequality does have some interesting initiatives that require further investigation.
Even on income tax, the Greens are not very progressive. At the 2008 election the party advocated a income tax policy that was barely more progressive than Labour’s relatively neoliberal one. In fact the Greens advocated lifting the threshold for the highest rate of marginal tax to the even higher rate of $80k. And despite advocating a capital gains tax, this proposal was heavily neutered by the key exemption of ‘the family home’, greatly reducing the policy’s impact. It also advocated introducing other ‘eco-taxes’ that would disproportionately hurt those on low incomes.
This shift to the right in accepting GST of 15% doesn’t appear to have caused any problems within the party, pointing to the dominance of the more pragmatic new leadership. In fact it’s not even clear that the leadership have bothered to get the membership’s approval for the next GST policy. This seems to be what the new Greens are all about.