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PM Rules Out GST Relief

Fuseworks Media
Fuseworks Media

Prime Minister Helen Clark says tax cuts to be announced in next month's budget will deliver timely relief for families, and she doesn't think GST will be removed on food.

Reports published today show an increasing number of families are feeling the pain of high mortgage rates and the soaring cost of living.

A survey in The Dominion Post revealed one in four New Zealanders are worried that they will not be able to meet their rent or mortgage commitments, while in Auckland a petition urging the abolition of GST on food is gathering support.

More than half those surveyed -- 52 percent -- say they are worse off financially than 12 months ago.

The New Zealand Herald reports shoppers are signing a petition outside city supermarkets urging the Government to abolish GST on food -- a response to the cost of filling the average trolley rising by more than a quarter in the past year.

But Miss Clark said it was unlikely the Government would make any changes to GST.

"GST has been in place since the mid-1980s and that was when schemes like family support, which has now become the much bigger and more significant Working for Families, began," she said on NewstalkZB this morning.

"Obviously there will be some tax relief announced in the budget and I think it's going to be very, very timely for families."

Miss Clark said price increases for some items, like butter, cheese and milk, were driven by the export prices farmers were getting for their products.

A Weekend Herald comparison showed butter, cheese and some varieties of bread have more than doubled in price.

Most meat, vegetables and fish are also much more expensive.

A spokesman for Finance Minister Michael Cullen said a one-off change to GST would not stop international forces pushing up food prices.

National's finance spokesman, Bill English, said his party preferred to tackle the affordability problem by cutting income tax.

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