Political & Economic week that was: Online GST crackdown imminent

Rob Hosking breaks down the political and economic week on NBR Radio and on demand at MyNBR Radio.

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Tax crackdowns are starting to feature more prominently in the political debate.

GST for online offshore purchases, extensions of which were announced this week, are really only the start. The government hopes to have GST for services such as Netflix and iTunes ready by, if not Christmas, then sometime next year. 

Goods – such as books – are seen as being more difficult for reasons of policing, although Australia is about to pre-empt New Zealand with proposals for firms such as Amazon having to register with the Australian Tax Office. 

If Australia does so, New Zealand might have to follow suit. The bigger game here is the collection of information about global taxpayers – individuals as well as businesses. 

The government is looking somewhat scared. The tax moves will not be popular, and moves elsewhere are not likely to help much.

It also emerged that the "bright line" test for property investors was a panic measure. It was cobbled together following a stirring speecha month before the last budget by Reserve Bank deputy governor Grant Spencer. 

More recently, there was the back and forth over changes to health and safety rules, details of which finally emerged this week. Some criticism is overblown, but the net political effect is the government appears to be classing worm farms as more dangerous than dairy farms. 

On a wider front, the opposition parties are stepping up calls for a “Plan B” from the government. This is a slogan, not a policy, and it assumes a government can “plan” economic growth. 

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