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Price "fixing" and the GST

by Dave Riley

As one of those consumers who are forced to shop "on a fixed income" -- and I guess today with so much industrial quietude about we all are similarly fixed -- I am hurting at the checkout big time.

As I shop it's not seasonal price rises that are kicking in because the astute shopper knows that what you lose on the swings you make up on the slides.

That's no longer allowed. The years of drought which impacted on our diet were nothing compared to the ratcheting mark ups I have to negotiate each week.

So do we shop and take it -- shyly accepting the price rises as something we can do nothing about ? After all, the (fanfare please!) market which today is supposed to rule our lives promises competition and lower prices -- that's right isn't it? This is perhaps a short lived adjustment working its way through my family's intestines. And later on ...give it time / give it time... prices will return to normal (whatever that means).

While the astute shopper knows that one must parcel one's poverty about by "shopping around" I'm running out of parcels.

So it was with much delight that I came across a new campaign being organised by the Residents' Action Movement in New Zealand

The thrust of RAM's campaign is to argue for the GST to be taken off food. You perhaps remember our version -- the GST (Goods and Services Tax) -- a slice of classic John Howard memorabilia? A item bequeathed to us by the Democrats (remember them?) and at the time opposed by the ALP.

Well it's still on your docket -- on everything you are paying for-- except some food items.

While it's true that the GST is not the root cause of the present food price rises. We can thank rising international commodity food prices, soaring petrol costs and weather for that. But we do know that these prices will be lower if we weren't paying a GST on them -- the Schedule 1 list

No government in an capitalist economy like Australia's is going to "fix" prices. Gough Whitlam said he would. So too did Bob Hawke as an Accord trade off. Remember the Prices and Incomes Accord? Baloney. Utter baloney. Never happened and, under capitalism, short of a war economy, never will. After all the market is sacrosanct. Dominus vobiscum (-- "The Lord be with you "which means: you're on your own.)

But it crops up occasionally as an aspirational Holy Grail. A carrot.

Capitalism with fixed prices! How about that? Wages surely get fixed but prices...you're dreaming.

But I digress.

While we know that a campaign to fix prices is a tall order -- despite the massive support there'd be for it I'm sure -- the logistics of such a campaign don't have transitional way stations. You'll note how the games are being played over the question of rising fuel prices. It's rhetoric. Who can have one ounce of confidence in the Australian Competition and Consumer Commission? Even when Allan Fels was ACCC chair and said a sotto voce "boo" at one time the corporations went after his scalp.

But I cannot help thinking that he RAM folk are onto something. At its core, their campaign is one against regressive taxation as an element of load sharing that underpins all rationalist economics.

As it could be deployed here...is something worth considering.

1 Com:

znalo | April 28, 2008

That's 'Residents Action Movement'.

-AA.

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