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Speaker 1: Inland Revenue has recommended lifting GST higher in order to

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Speaker 1: pay for superannuation. It's released a report. It's a draft

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Speaker 1: report looking at the expected cost of supern It says

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Speaker 1: we can either we do one or two things. We

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Speaker 1: can either cut government spending or we can and this

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Speaker 1: is the tax man's pervert option, raise more tax. Jffna

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Speaker 1: Nightingale is an independent tax expert in with US.

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Speaker 2: Now, Hey, jf Good afternoon, Heather.

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Speaker 1: Now, they haven't said what they would prefer to lift

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Speaker 1: the GST to, but if you take a punt at it,

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Speaker 1: where do you think it would go?

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Speaker 2: Well, it depends. The lifting GST is a very fast

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Speaker 2: and efficient way to raise revenue. Gsts about quarter of

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Speaker 2: our quarter to a third of all of our tax

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Speaker 2: so it's a very quick way. But it's got a

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Speaker 2: whole of problems that it's very regressive, it impacts much more,

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Speaker 2: much harder on lower income people, and you know, it's

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Speaker 2: a politically difficult thing to do. So all that doing

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Speaker 2: really is trying to explore if we can't halt the

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Speaker 2: track of increasing expenditure mainly driven by age, we will

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Speaker 2: need to raise more taxes or cut that expenditure. But

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Speaker 2: if we can't cut that expenditure politically too difficult, we

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Speaker 2: need to raise new taxes. So they're exploring what the

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Speaker 2: best mix of new taxes might be in a sort

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Speaker 2: of a prink piece.

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Speaker 1: As you say, it is regressive, right, But what they

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Speaker 1: say is, rather than cutting the GST of groceries, which

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Speaker 1: is obviously the one everybody goes to, what could be

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Speaker 1: used instead as tax credits? Would you prefer that?

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Speaker 2: Yeah? The problem. The problem with taking GST off food

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Speaker 2: or good things, if you like health care or education,

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Speaker 2: is that you're not always sure that those savings are

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Speaker 2: going to be passed on to consumers. Some of them

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Speaker 2: might get captured by the suppliers, and so it's a

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Speaker 2: bit slippery where the savings go. And the second thing

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Speaker 2: is that it causes real compliance difficulties. What's fresh food,

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Speaker 2: what's not fresh food? And there's some hilarious examples off sure.

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Speaker 2: So the other option they've suggested is that we raise

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Speaker 2: the GEST, keep it really broad, no exemptions, but we

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Speaker 2: rebate back a certain amount of the extra tax revenue

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Speaker 2: are extra GST revenue, we rebate it back to lower

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Speaker 2: to higher income support at the lower end in order

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Speaker 2: to offset the regressiveness. That's the system that I would

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Speaker 2: prefer if we have to go down that track.

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Speaker 1: Yeah, now very quickly. Do you think this is the

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Speaker 1: case of a government department telling a government what it

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Speaker 1: wants to hear?

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Speaker 2: No, No, I think this is the case. Under the

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Speaker 2: Public Finance Act, they have to do this every three years.

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Speaker 2: They have to think out loud about the future, and

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Speaker 2: that's what they're doing. They've been very careful not to

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Speaker 2: make any recommendations and they absolutely say it's the parliament.

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Speaker 2: It's the government's job to make the decisions. They're just

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Speaker 2: setting out the various options.

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Speaker 1: Okay, good stuff, Jeff, Good to talk to you as always,

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Speaker 1: Jef Nightingale, Independent tax expert. For more from Heather Douplassy

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Speaker 1: Allen Drive, listen live to news Talks the'd Be from

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Speaker 1: four pm weekdays, or follow the podcast on iHeartRadio.