“The last thing New Zealand needs is more tinkering with the tax system,” said John Pemberton, Democrats for Social Credit (DSC) Deputy Leader, “although most voters would agree that it is cumbersome, costly, and easy to evade and defraud.”
“The Tax Working Group has clearly identified what is wrong, and what a good tax system needs, but can offer only solutions that require more layers of regulation and compliance. John Key and Bill English gained nothing from this expensive exercise, and the PM’s opening address to parliament reflects this.”
“The National Party has consistently deplored the rise in compliance costs for businesses. Now is the perfect opportunity for them to silence the bleating of their supporters by adopting a bold new form of tax: the Financial Transactions Tax (FTT).”
“FTT is simple, fair, broad based, and unavoidable. It is so cheap to collect that close to 100% of the revenue will be available for Government use. There is a growing call for its implementation, both in New Zealand and overseas. The most recent version, which has been dubbed the ‘Robin Hood Tax’, could go a long way toward the reduction of other, more onerous taxes, the relief of poverty, and repair of the environment.
“FTT can begin by replacing GST, at a rate so low that individuals will scarcely notice the removal from their accounts, yet high enough to gather the revenue the Government requires. A tax system based on FTT will be sustainable, no longer affected by the volatility of labour and capital as sources of revenue.”
Mr Pemberton noted that one issue the Tax Working Group identified is that speculative investment channels capital away from the productive working economy.
“Foremost of all the advantages of FTT is the suppressive effect on speculation” he said. “As each and every transaction incurs a cost, short term micro-trades and overnight investments become less viable, and long term investment in the real economy is encouraged.”
“The tax system needs replacing, not fixing” concluded Mr Pemberton.