Petrol tax double whammy

The 11.5 cent petrol tax increase (twice as much in Auckland) will have a double whammy effect by also raising the price of food and most other goods as freight companies and shops seek to recover their additional costs.

That will immediately wipe out any gain low wage workers may have achieved through the recent minimum wage increase, and will leave over half NZ's population worse off. High income earners will barely notice a ripple.

Instead of alienating its traditional support base, Labour should have looked to the lessons of the real Labour Party of 1935, and instead of imposing more taxes, use the country's Reserve Bank, at virtually no cost, to provide funding for housing, health and infrastructure projects.

This approach was analysed by an International Monetary Fund report released in 2012 which stated “Allowing the Government to issue money directly at zero interest, rather than borrowing that same money from banks at interest, would lead to a reduction in the interest burden on government finances and to a dramatic reduction of (net) government debt…..”

Labour should be looking at its history instead of taxing its most loyal supporters.

T Livingston, Whakamarama.


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