Just a Little extra tax

The ink is barely dry on the Labour and Green Parties’ attempt to convince voters they won’t overtax and overspend which includes a promise for no tax increases.

But Andrew Little is already calling for a new tax:

Labour leader Andrew Little wants a “tourist tax” charged at the border to help pay for tourism infrastructure, rejecting Tourism Minister Paula Bennett’s concerns it risked making New Zealand look like a “rip-off.”

Little said a “modest” levy would be ring-fenced to pass on to local councils to use on tourism-related infrastructure. . . 

On Friday Rob Hosking pointed out the difficulty with the Labour-Green framework:

The real question is about the other promises Labour and the Greens are making and how these might fit within that framework.

The short answer is, they don’t.

The ability to fund free tertiary education and start payments into the NZ Superannuation Fund alone will test the limits of that framework. Those two policies alone will cost literally billions of dollars.

That is going to make it difficult to fit within one of the other joists in the Labour-Green fiscal framework: keeping government spending at around 30% of GDP.

One of these things is sheer spin: either the promises of new spending policies or the fiscal framework itself.

Take your pick.

Little’s suggestion of a new tax just days after the attempt to convince us of the Labour and Greens fiscal prudence has shot a very big hole in the framework.

There is a case for more spending on tourism infrastructure but Lincoln University professor of Tourism David Simmons has calculated that the government made a $630m surplus once tourism related costs – such as those for Tourism New Zealand and Department of Conservation visitor services – were deducted from the GST take.

We don’t need a new tax, whether it’s levied on New Zealanders or visitors.

A new tax is a tax increase by another name. That Little is considering the idea shows how flimsy the fiscal framework is.

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One Response to Just a Little extra tax

  1. Andrei says:

    Of course the National Party imposes new taxes by stealth! and them pretend they haven’t raised taxes.

    This is because they are a very devious bunch

    The latest is the new insurance “levies” which will see everyone’s insurance rise, nominally to fund the fire service but of course the money collected by the insurance companies for this noble purpose attracts GST (which let us not forget National raised) thus generating an increased source of tax revenue hidden by smoke and mirrors

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