Agree 100%. I swipe my card every-time. Never carry a 'chip' card. Now those of us who use a few seconds to save fees are going to have them lumped into the price and pay extra.
Totally agree with you - more false pretence from 'face on a thumb'. Luxon would nail the nexrt election if he just went to Taita with the cops and told three people "You're going with these nice policemen and until you tell us which of you killed baby Ru - you'll be staying in the sex offender's wing at Remutuka prison." He'd be the country's hero. But he won't.
I disagree with removing GST on fruit and veges. The simplicity of GST with there being few exceptions means lower admin costs. Add an exemption and people will creatively find ways to exploit it. Costs will be lower but not by the full value of GST.
I’ve never understood why people think removing GST on fruit and vegetables is going to significantly improve the cashflow of low-income households. Since you support the idea can you help me out? Am I not looking at this right?
If you remove the charge of GST on the fruit and vegetables does this mean that the growers cannot claim GST on their inputs – fertiliser, seed, fuel for the harvester. If some of the produce does not go to food, but another by-product would you have to apportion inputs accordingly.
How much is the fruit and vegetable portion of any shop? I grow a lot of my own vegetables so don’t know how much people purchase in their weekly grocery shop.
Also if the tax take for the government is reduced by not having GST on these items do those receiving benefits funded by those taxes get reduced? People on superannuation, benefits, Working for Families etc. Wouldn’t that be fair? Then only those higher income households benefit from the removal of GST which isn’t the point.
I just think of the administration of a scheme like that and how people try to manipulate the rules to suit their purposes. So I get a bit stumped.
All very good points Steph - but personally I don’t think it ever should have been applied. We have taxes on taxes in this country. And the more we give to those on lower incomes the more opportunity for grift(not always) eg school lunches. Owner of our local New World saw ciggy and alcohol sales increase exactly proportionate to introduction of free lunch program.
Btw - great you grow most of your own veges - we are fruit independent (except bananas) and pimp out veges in the summer etc.
GST on food is a bloody nightmare of complicated inputs and outputs!
I know what you mean about taxes on taxes. Fascinating about the New World owner. That's so disappointing hey. I'm not sure what the answer is. 🤔
Good on you re fruit!! Passionfruit and strawberries only survive at mine. 1 brilliant year of cherries and I hold my breath every year. The avocado tree feeds the neighbourhood too. I am in a poor neighbourhood and everyone has the same area as me but don't put vegies in. I don't understand that, so think maybe they don't eat them.
I’m in a poor area too - but people have lost connection to the soil I think - or they tried too hard and set themselves up for failure. My blueberries are mediocre- but have plums, passion fruit, nectarines, figs, apples - wonderful blackberries and boysenberries and strawberries - guavas… just planted persimmon - avocado about a year off fruiting - that will save me a bomb!
We buy 1/2 a beast every 9mths and a sheep when we can. I have no idea how we would cope if not.
Grocery bill for 3 adults is still $300-350 per week 😳
I'm not an accountant, but I keep the books for a few businesses and this is how I believe it would work. If fruit and veg no longer attract GST, that means the growers don't have to pay GST, therefore why would they need to claim GST on their inputs? The inputs are still fully claimable in terms of income tax, but the company could deregister for GST if they no longer supply any GST-attracting goods or services. If they were supplying some of each, then they would just have to code it correctly in their books, GST on all income and expenses related to the other business, and no GST on the income and expenditure related to fruit and veg. I could be wrong, but this is how I have to do it for a company which has both residential and commercial investment properties (residential attract no GST, commercial attracts GST). To me, it sounds like a clever policy, not only saving money but making healthy food more attractive.
I understand what you are saying. I've worked as an accountant for over 30 years and discussed this this afternoon with a colleague before posting.
If the purchase of the farmland was zero rated because all parties were GST registered then GST would be payable on the land on deregistration plus any equipment etc. This may be a one off but also
how many farms are 100% purely fruit or veg. If fruit would juice be counted at fruit or a separate food item. Corn can be made into several different food types. How do you apportion? If the changes shifted to all food groups I could see issues with meat as some is processed as meat and some of the animal gets turned into blood and bone.
On top of this what is the average weekly cost for shoppers on fruit and veg? Are the savings on the fruit and veg worth the extra administrative costs?
Oh, I think I just realised what I was missing, the middleman, the supermarkets right? So unless each of the supermarkets purchases is direct from a supplier who only supplies fruit and veg, there would be a lot of trouble with the coding?
That’s sweet of you to say, but I can’t have told you anything you didn’t already know, I thought you just wanted a basic understanding of how it would work. I guess to know the answers to all your questions we’d need to know what proportion of growers do more than just straight fruit and veg (because correct me if I’m wrong, but if most of them could simply deregister for gst that would be actually a savings in admin costs, right? ）I imagine it’s annoying when governments put through policies that involve change to procedures, but doesn’t that also happen quite often? I don’t know, but it feels like I’m often hearing about it, like for example the changes to claimable mortgage interest, percentages changing over several years, seemed annoying too. The key questions then are how many farmers are affected negatively vs positively, and like you mentioned at the end, how much do the savings to the consumer add up to if compliance costs for farmers are indeed increased? No idea how to find out though. If the net effect is a small savings to the consumer, and it might have the added effect of making healthier food more attractive, in my opinion would be worth it, but you’re right, would need more investigation to see the costs vs benefits.
Exactly what you are saying. I get frustrated when changes are made purely because they are a popular idea and to catch a voter base, yet have no positive impact. Yep mortgage interest and provisos if a new build or not, or bright line changes. Argh.
My concern is that to make a change to the GST that there could be all sorts of exceptions and it would turn into a frankenstein law change. People do love to find loop holes. I'm all for simplicity.
Perhaps a more robust acceptance of the New Zealand currency, cold hard cash, would lessen the hassles of the paywave machines which are a guessing game as to 'who does and who doesn't charge'. I'm also for removing GST from basic food and clothing.
So sick of the nats frittering at the edges which in reality does sweet f.a. How about taking a tax off tax like petrol. That way everyone wins a bit and so easy to manage. If one doesn't have a car, it should also bring down the fares for buses and taxis. It would so bring down logistic prices for getting food to supermarkets, supplies to tradies on site to make bulding costs a bit cheaper, etc. I could go on, but basically it would benefit everyone in every way.
Agree 100%. I swipe my card every-time. Never carry a 'chip' card. Now those of us who use a few seconds to save fees are going to have them lumped into the price and pay extra.
Totally agree with you - more false pretence from 'face on a thumb'. Luxon would nail the nexrt election if he just went to Taita with the cops and told three people "You're going with these nice policemen and until you tell us which of you killed baby Ru - you'll be staying in the sex offender's wing at Remutuka prison." He'd be the country's hero. But he won't.
Govt would be better to take the tax of a tax by making local government rates exempt.
I disagree with removing GST on fruit and veges. The simplicity of GST with there being few exceptions means lower admin costs. Add an exemption and people will creatively find ways to exploit it. Costs will be lower but not by the full value of GST.
💯.
I’ve never understood why people think removing GST on fruit and vegetables is going to significantly improve the cashflow of low-income households. Since you support the idea can you help me out? Am I not looking at this right?
If you remove the charge of GST on the fruit and vegetables does this mean that the growers cannot claim GST on their inputs – fertiliser, seed, fuel for the harvester. If some of the produce does not go to food, but another by-product would you have to apportion inputs accordingly.
How much is the fruit and vegetable portion of any shop? I grow a lot of my own vegetables so don’t know how much people purchase in their weekly grocery shop.
Also if the tax take for the government is reduced by not having GST on these items do those receiving benefits funded by those taxes get reduced? People on superannuation, benefits, Working for Families etc. Wouldn’t that be fair? Then only those higher income households benefit from the removal of GST which isn’t the point.
I just think of the administration of a scheme like that and how people try to manipulate the rules to suit their purposes. So I get a bit stumped.
All very good points Steph - but personally I don’t think it ever should have been applied. We have taxes on taxes in this country. And the more we give to those on lower incomes the more opportunity for grift(not always) eg school lunches. Owner of our local New World saw ciggy and alcohol sales increase exactly proportionate to introduction of free lunch program.
Btw - great you grow most of your own veges - we are fruit independent (except bananas) and pimp out veges in the summer etc.
GST on food is a bloody nightmare of complicated inputs and outputs!
I know what you mean about taxes on taxes. Fascinating about the New World owner. That's so disappointing hey. I'm not sure what the answer is. 🤔
Good on you re fruit!! Passionfruit and strawberries only survive at mine. 1 brilliant year of cherries and I hold my breath every year. The avocado tree feeds the neighbourhood too. I am in a poor neighbourhood and everyone has the same area as me but don't put vegies in. I don't understand that, so think maybe they don't eat them.
I’m in a poor area too - but people have lost connection to the soil I think - or they tried too hard and set themselves up for failure. My blueberries are mediocre- but have plums, passion fruit, nectarines, figs, apples - wonderful blackberries and boysenberries and strawberries - guavas… just planted persimmon - avocado about a year off fruiting - that will save me a bomb!
We buy 1/2 a beast every 9mths and a sheep when we can. I have no idea how we would cope if not.
Grocery bill for 3 adults is still $300-350 per week 😳
It’s so expensive now…
But my motto is eat well to stay well…
Take care
❤
I'm not an accountant, but I keep the books for a few businesses and this is how I believe it would work. If fruit and veg no longer attract GST, that means the growers don't have to pay GST, therefore why would they need to claim GST on their inputs? The inputs are still fully claimable in terms of income tax, but the company could deregister for GST if they no longer supply any GST-attracting goods or services. If they were supplying some of each, then they would just have to code it correctly in their books, GST on all income and expenses related to the other business, and no GST on the income and expenditure related to fruit and veg. I could be wrong, but this is how I have to do it for a company which has both residential and commercial investment properties (residential attract no GST, commercial attracts GST). To me, it sounds like a clever policy, not only saving money but making healthy food more attractive.
I understand what you are saying. I've worked as an accountant for over 30 years and discussed this this afternoon with a colleague before posting.
If the purchase of the farmland was zero rated because all parties were GST registered then GST would be payable on the land on deregistration plus any equipment etc. This may be a one off but also
how many farms are 100% purely fruit or veg. If fruit would juice be counted at fruit or a separate food item. Corn can be made into several different food types. How do you apportion? If the changes shifted to all food groups I could see issues with meat as some is processed as meat and some of the animal gets turned into blood and bone.
On top of this what is the average weekly cost for shoppers on fruit and veg? Are the savings on the fruit and veg worth the extra administrative costs?
Oh, I think I just realised what I was missing, the middleman, the supermarkets right? So unless each of the supermarkets purchases is direct from a supplier who only supplies fruit and veg, there would be a lot of trouble with the coding?
Ah, that would have been good context to add to your first comment; I needn't have wasted my time, you'll know far better than I do.
Not necessarily know better. Because sometimes you can miss an angle. I appreciated your comment. !!
That’s sweet of you to say, but I can’t have told you anything you didn’t already know, I thought you just wanted a basic understanding of how it would work. I guess to know the answers to all your questions we’d need to know what proportion of growers do more than just straight fruit and veg (because correct me if I’m wrong, but if most of them could simply deregister for gst that would be actually a savings in admin costs, right? ）I imagine it’s annoying when governments put through policies that involve change to procedures, but doesn’t that also happen quite often? I don’t know, but it feels like I’m often hearing about it, like for example the changes to claimable mortgage interest, percentages changing over several years, seemed annoying too. The key questions then are how many farmers are affected negatively vs positively, and like you mentioned at the end, how much do the savings to the consumer add up to if compliance costs for farmers are indeed increased? No idea how to find out though. If the net effect is a small savings to the consumer, and it might have the added effect of making healthier food more attractive, in my opinion would be worth it, but you’re right, would need more investigation to see the costs vs benefits.
Exactly what you are saying. I get frustrated when changes are made purely because they are a popular idea and to catch a voter base, yet have no positive impact. Yep mortgage interest and provisos if a new build or not, or bright line changes. Argh.
My concern is that to make a change to the GST that there could be all sorts of exceptions and it would turn into a frankenstein law change. People do love to find loop holes. I'm all for simplicity.
Perhaps a more robust acceptance of the New Zealand currency, cold hard cash, would lessen the hassles of the paywave machines which are a guessing game as to 'who does and who doesn't charge'. I'm also for removing GST from basic food and clothing.
So sick of the nats frittering at the edges which in reality does sweet f.a. How about taking a tax off tax like petrol. That way everyone wins a bit and so easy to manage. If one doesn't have a car, it should also bring down the fares for buses and taxis. It would so bring down logistic prices for getting food to supermarkets, supplies to tradies on site to make bulding costs a bit cheaper, etc. I could go on, but basically it would benefit everyone in every way.
With such crimes, the whodunnit mantra; "Follow the money", applies.
Hurried consumers must vacate the queue as quickly as possible to avoid sneers from behind. Under-staffing pays in strange ways.
It shows they have a shallow understanding economics. That is NOT what we voted for.
Yep if Govt cared about health and wealth of citizens and NZ production, they'd make fresh fruit, veges, NZ meat, dairy and flour GST free.
Bi-line ... buy home, buy fresh, buy healthy.