Smoke & Mirrors

Sunday was the day we all started paying GST on internet shopping. It’s New Zealand’s version of the ‘Amazon Tax’ which, according to the Labour Government, is supposed to level the playing field for domestic retailers. So the place you buy stuff from in Armenia will be required to collect NZ GST on goods under $400 and give it to the government.

This will obviously come at a cost to that company. Clearly, the government’s rationale is the hope that we will change our habits and buy the same thing at a hugely inflated price from a NZ retailer. The government will be collecting this GST on items that not one person in New Zealand has lifted a finger to provide me goods or service for. Nash believes this will bring in $130 million a year. I doubt that very much as it is based on people continuing to shop online at the same rate as yesterday.

This will just penalise those folks with less disposable income who can’t afford to shop at a NZ based retailer for the same thing.

Australian retailer Chemist Warehouse has set up shop in NZ. They routinely charge way less than local pharmacies and cosmetic/perfume stockists. In Australia, there are limits on where they can set up business, i.e. not within a kilometre (or more in some cases) of an existing pharmacy – a rule that doesn’t seem to apply here and could impact on the viability of established New Zealand businesses. So even charging NZ GST, they may put New Zealand businesses out of business. But that’s ok with the Government and just before Christmas too when folks are more likely to be shopping online. Coincidental timing? I think not. Pretty cynical actually.

Our government is just addicted to tax…even if it costs us a fortune to collect it.

The ‘levelling the playing field for NZ retailers’ is just a smokescreen propaganda diversion. The only thing the CoL was annoyed about was not getting 15% GST on stuff not bought here. Prices might go up when you change the currency into NZ dollars and the GST is calculated on the NZ conversion. Remember that GST is also charged on freight! The CoL is desperately hoping that folks will just start shopping in NZ as the $100 (NZ dollars) item on Amazon is probably still way cheaper than the same thing listed in NZ for $300. But 15% GST on the $300 item bought locally is still better tax-wise. Either way, it’s a new tax that Jacinda Ardern said would never happen.

We will just have to add it to the growing list of new taxes that Jacinda was referring to when she said “no new taxes”. What are we up to now? Is it eight new taxes? I’m sure it is at least that.

When the CoL starts labelling them ‘levies’ rather than taxes, they dance on the head of a very sharp pin when they are both one and the same thing. If you totalled up the new taxes and levies together, the list of ‘no new taxes’ would be quite impressive. According to the TV, items purchased before Sunday will be treated leniently when coming into the country. Merry Christmas New Zealand.