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Henare’s bigoted attack on poor proven false

Written By: - Date published: 1:53 pm, May 16th, 2010 - 61 comments
Categories: food, poverty - Tags: , ,

I’ve always thought one of the defining features of the Right is their views are based on assumptions and prejudices rather than on knowledge and facts. Today, Tau Henare is reported opposing Labour’s suggested policy of taking GST off fruit and vegetables. He said “If they can’t afford to buy a lettuce or a tomato then they should give up the drink and the smokes,” and “It’s a well-known fact that poor people, if they don’t have enough money, will buy smokes and not bread.”

Really? Well, it took two minutes checking on the Stats website to prove him wrong. (you might have hoped the journo who wrote the story, Matt Nippert, could have found the same info for his article too).

The Household Economic Survey collects spending and income data for households and divides them up by decile:

The first thing I hoped you noticed is that 50% of households have total incomes below $56,000 and only 20% have incomes over $100,000. But check it out, poor households spend less on alcohol and cigarettes than rich families do.

Check it out by percentage:

As a percentage of their incomes, poor families spend more on fruit and vegetables, and less on restaurant and takeaway food, less on alcohol. And we’ve already seen that rich families spend more on tobacco products in dollar terms.

Do you think that information will affect the prejudices of Henare and his rightwing mates? Not a chance.

61 comments on “Henare’s bigoted attack on poor proven false ”

  1. Nemesis 1

    So when Henare says Maori have choices to buy tomatoes and lettuces, he’s being “bigoted”.

    When Kelvin Davis says:

    We are generally dumber, sicker, poorer, more pissed, drugged and pregnant than any other group of people in New Zealand. We know the problem, but what’s the solution?

    Well let’s repeal the Foreshore and Seabed and put the F&S into Maori title. We can be dumber, sicker, poorer, more pissed, drugged and pregnant at the beach. That’ll make all the difference. At least we’ll be dumber, sicker, poorer, more pissed, drugged and pregnant on our own turf and surf.

    Let’s get rid of P. That crap is a scourge and along with alcohol, cigarettes and marijuana is killing our people. But it’s still only a symptom of what the real issues are.

    The real issue for Maori is ourselves.

    Then he’s showing leadership. Your colours are so obvious M.

    • Marty G 1.1

      Davis is saying that the priorities are wrong when you’re more worried about the foreshore and seabed then about sorting out the social ills that afflict Maori.

      Henare is saying there’s no point taking GST off food and vegetables because the poor are too morally degenerate to do what’s best for themselves and, so, don’t deserve any help.

  2. vto 2

    Did Dipstick Tau say what happens with those that don’t drink or smoke but still need a lettuce or tomato? I would imagine not and as such he is just sounding off like a typical dumbass shithead headline-grabbing truth-twisting waste of time politician.

  3. Anita 3

    Arguably these stats actually prove Henare’s point. The poorest in NZ are still spending money on tobacco and alcohol which, given our appallingly low benefit rates and minimum wage, means that must be money that would otherwise be spent on food.

    I don’t disagree with your general point, but the stats read in both directions.

    • Marty G 3.1

      The stats say that the poor aren’t being irresponsible with their money – they spend less of their money on alcohol and cigarettes and more on fruit and vegetables than better off people.

      • Anita 3.1.1

        The stats say the half of your sentence. The first half is a judgement call, one on which you and Henare disagree.

        A question that perhaps illustrates the division:

        If you’re so strapped for cash that your children are going to school hungry, is it responsible to spend any money on tobacco and alcohol? I’m guessing Henare would say no and you would say yes.

        I would say that we should ensure people have enough that they can feed their children and indulge a few vices; whether it’s a beer in front of the rugby or a stash of patchwork fabric.

        • Zorr 3.1.1.1

          The stats say NOTHING about the situation in the household. Is it a rental property with single people, a nuclear family or a single dad? These are questions not answered in this survey as far as I am aware. As far as observations go, Marty G made some based on the evidence available and you have chosen to then attempt to disagree with him using a situation that isn’t actually covered by these stats.

          Congratulations at failing at information literacy.

          • Anita 3.1.1.1.1

            I think you might actually be agreeing with me.

            The stats do not show, one way or the other, whether poor people are irresponsible, or whether they are buying alcohol and tobacco instead of fruit and veg.

            The only thing I am disagreeing with Marty about is whether or not he has proven Henare wrong with those stats.

            Like Marty I think Henare was letting his prejudices show, and like Marty I doubt Henare’s prejudices are founded on any evidence.

            • Zorr 3.1.1.1.1.1

              Fair enough.

              I have just found that in a lot of cases it is best to understate ones argument and strengthen it as need dictates rather than potentially overstate a point.

              It just so happened that in questioning Marty Gs point it did appear that you were coming down on Henares side with the comment about irresponsible shopping. I would prefer to operate from a viewpoint that goes something like this:

              If we take the tax off fruit and vegetables it encourages purchasing them and helps those who are spending large portions of their income on them. For those households who are spending irresponsibly it provides near to no assistance as they are not spending the same proportion of their income on those items (if at all).

              After writing that, I can’t actually see how a successful argument can be made for continuing to have GST on fruit and vege. Taking GST off them further encourages the kind of nutrition that we have been struggling towards so long as a nation.

              • Anita

                I’ll make two arguments against removing GST on fruit and veg, I don’t think I agree with either argument, but they’re interesting

                1) Fruit and veg is not discretionary for poor people, so making it cheaper won’t increase the amount of fruit and veg they purchase and consume. They will still buy as few onions, potatoes, carrots etc as they can get away with (just as they buy as little rice, bread, sugar as they can get away with). They money saved will go on something else which is a little more discretionary (perhaps their kids clothes). In the sense removing GST on fruit and veg is a straight tax break, not a targeted one, and it benefits the rich more than the poor (because the rich spend more on fruit and veg in absolute terms, see Marty’s first table). We would be better giving straight forward tax relief to the poorest, at least that way we can target it at the most needy.

                2) The administrative overhead of GST being non-blanket will cause an overhead across the economy causing cost increases which will in aggregate balance out any actual savings.

    • r0b 3.2

      Anita – welcome back – so good to see you here again!

      • Anita 3.2.1

        Hey r0b! 🙂

        It’s lovely to be a tiny bit back. I will only be around a little, and only on-and-off for the next few months I think. Then I’ll be really back 🙂

        I’m enjoying your writing btw.

        • r0b 3.2.1.1

          Then I’ll be really back

          I’ll look forward to it.

          I’m enjoying your writing btw.

          Cheers!

    • Monty 3.3

      You silly and fiscally ignorant fools. According to your own figures the average family spends $20 per week on fruit and Vegetables. take off the GST component of $2.60 and that is all the extra that families will have in their pocket. Ok Labour last time gave their poor 67 cents or a packet of chewing gum. Now the family can splash out and buy a couple of packs of chewing gum.

      Of course the supermarket already knows the consumer will pay $4.00 for a bag of apples – so what the hell – may as well keep charging $4.00 and make the extra profit. Goff is a fool. the only people more foolish are those who get sucked in by the faint prospect of $2.60 in their pocket.

  4. When we’re paying Henare’s not inconsiderable wages, I believe he has a responsibility — and also the means — to determine whether a”well-known fact” is actually true before uttering it in public. We don’t pay our elected members to just make things up.

    Good work, Marty.

  5. john 5

    Back in the 90s when Tau was a New Zealand First man he advocated reduced tax rates for the low paid. He’s a turncoat mercenary for sale selling out the people he should be helping. People like him are polarizing NZ between the insultable “poor” and their self appointed keepers.

  6. Herodotus 6

    So Labs anti GST increase but for the sake of the poor COULD reduce this increase on F&V. That is So generous a promise to save the poor. From the data above what will that save $1-$2 /week for families earning under $56k. No wonder we have a certain section of our society feeling displaced, when those who give lip serve that they are working for them (i.e. Lab) and that is all it is. Then we read that protecting the rich landlords with tax payer subsidies Lab supports. Who does Lab really support? those who are conned to giving their vote or the filthy rich that they support with tax loopholes at the expense of the PAYE worker ?
    No wonder when visiting a meetng or 2 at “Drinking Liberally” there is an under current from parts of the left against Lab.

  7. Uhm, how come when Labour was still in power, all Labour party supporters, said it couldnt be done, and shouldnt be done, now you are for it?

    Even posters on the standard said this.

    But now it can be?

    • Anita 7.1

      Don’t tell me you’re expecting a political party’s policies to be the same in power as they are when they’re trying to get into power. How quaint! 😉

    • Bright Red 7.2

      I don’t think Marty was writing for the standard before the last election. And I don’t see him actually endorsing the proposed policy here.

      So, you expect that every writer will always remain consistant not only with their own previous views but with the previous views of any other previous writer. Wow – Brett supports groupthink. I support people being allowed to think for themselves.

  8. megs 8

    Tau is an ignorant toss pot…. Really offensive drivel comes out of his mouth…

  9. big bruv 9

    So…..I should pay more tax so some stupid prick can still buy his booze and fags?

    God forbid that there should ever be an ounce of personal responsibility?

    [lprent: You’re not exactly a person who is much on “personal responsibility” yourself are you?. You act more like troll that runs away whenever you’re challenged. Probably because you seldom ever know what you’re talking about perhaps? ]

  10. Herodotus 10

    As we spend $1.6b (2004 figures) on tobacco and that from the household data $380/week then I conclude that there are 4.1m households I am confused as there are only 4.5m people living in NZ.
    Marty please tell me why I am confused, and no wonder Tau is as who can we believe remember “lie,lies, dame lies …”
    As an aside we spend $4-5b on alcohol yet the harm it casues is somewhere betw $1-4b
    By using the same process regarding Alcohol i.e. 4.1m households I get an answer of alcohol spend of $4b which is at the lowest end of the spectrum
    http://www.lawcom.govt.nz/UploadFiles/Publications/Publication_154_437_Alcohol%20in%20our%20lives%20-%20Issues%20Paper%2015.pdf
    http://www.sfc.org.nz/pdfs/taxareportsummary07.pdf

    [lprent: Have a look at the FAQ about how to insert links cleanly. They’re much less likely to get caught in the spam trap. ]

    • RedLogix 10.1

      As an aside we spend $4-5b on alcohol yet the harm it casues is somewhere betw $1-4b

      Personally I’d think that $1-4b of harm is on the low side. How about this:

      Associated with 80% of crime with costs @ $8b = $6b pa

      Associated with 30% of health care/accident costs @ $12b = $4b pa

      Associated with a 10% loss of productivity in the workplace @ $100b = $10b pa.

      Adding these up I get a total harm of $20b pa… and this is before you count any of the heartache, shame and utter misery the vile stuff causes.

    • Anita 10.2

      Herodotus,

      I’m with RL, your estimation of alcohol harm is unsubstantiated and inconsistent with every piece of research I’m aware of.

      BERL’s 2009 report is here.

      RL’s figures are roughly inline with Brian Easton’s research from 1995, which I can’t find online right now. Link later if/when I do.

      In fact, your first link contains this quote:

      Quantifying the magnitude of alcohol-related harm, and putting a dollar value

      on it, is not an exact science and is sensitive to which harms are being considered.
      It is inevitably a value-laden exercise. In New Zealand there have been three
      recent attempts to do so. In 1997, economist Dr Brian Easton estimated the
      social costs of alcohol misuse to be $16.1 billion in 1990 ($24.5 billion in 2005
      dollar terms).17 Dr Easton’s estimate covered all social costs including the human
      costs of morbidity and mortality arising from alcohol consumption. In the same
      year, but using quite a different method, University of Otago academics
      estimated the social cost of alcohol abuse to be between $1 billion and $4
      billion in 1999 (a midpoint of approximately $3.8 billion in 2005 dollar terms).18
      A Treasury working paper in 2002 reanalysed the University of Otago study
      using different assumptions to estimate the external costs (i.e. those not included
      in the cost of alcohol) of harmful alcohol use to be most likely more than $735
      million annually in 1991.19

      Can you provide any evidence of your surprisingly low number?

  11. Adrian 11

    A senior wine marketer once told me that the NZ supermarkets are the nastiest bastards in the world. The only people to benefit from dropping GST on F&V would be them, they would have the prices back up to original levels in a fortnight.

  12. Herodotus 12

    Marty my aim regarding reporting of House hold expenditure was that cross checking the data you have quoted displays to me that there is a vast underreporting by 50% as to expenditure rported. Where does this additional $800m get spent?
    For me also is displays the short comming of house hold data, as from memory there is no sample base the survey is sent out and is dependant upon the makeup of respondents and intregity of the info. I also could not find the gross number of households to compare with the 4.1m I derrived at.
    Please be gently on Tau as I can see why he has difficulties.

  13. joe bloggs 13

    according to those figures a household with an income below $56,000 a year spends $17 or less on fruit and vegetables.

    So Mr 7%’s reduction in GST from 15% back to 12.5% for fruit and vegetables would amount to 36 cents or less a week – big deal!

    Now where’s my chewing gum….

    • pollywog 13.1

      To be honest, taking gst off fruit and veg wont make stuff all difference to the average household, (mine) but it might for people who buy bulk, like restaurants. Somehow i can’t see them dropping prices because of it though. Even if you dont put GST on the final price you’d still have to factor the increase in to other stuff that went into producing and distributing the produce and so the price at the counter would still go up…yeah ? It’d be more a symbolic gesture wouldn’t it ?

      what i’d save in GST probably wouldn’t even buy a latte. I’d rather raise GST on luxury items only ? Stuf only ‘rich pricks’ would/could buy 🙂

      • Anita 13.1.1

        Restaurants (and most other businesses) don’t pay GST, so it will make no difference to them.

        • pollywog 13.1.1.1

          Restaurants (and most other businesses) don’t pay GST,

          Really ?…how does that work and why not ?

          • Anita 13.1.1.1.1

            Businesses that charge GST get the GST they pay refunded. It’s to stop GST compounding.

            Let’s see, I need an example!

            Farmer Anna buys corn to feed her free range chooks,
            Wholesaler Bernie buys Anna’s eggs
            Cafe chef Caroline buys eggs from Bernie
            David has eggs florentine from Caroline’s cafe.

            In each case Anna, Bernie and Caroline pay GST on what they buy and then get it refunded. They charge GST on what they sell. Only David actually pays GST,

            If that didn’t happen Anna would simply pass on her GST cost to Bernie, Bernie would pass on his own plus Anna’s to Caroline and so on. Eventually David would end up paying four lots of GST. This would be silly 🙂

            Incidentally this also illustrates one issue with taking GST off fruit and veg. Taking the GST off the spinach has no effect on David, because GST will still exist on eggs florentine, and the fact Caroline didn’t pay it on the spinach just makes her refund process more complicated.

            • joe bloggs 13.1.1.1.1.1

              I hope that you’re not in business Anita because if you are then the IRD will be down on you like a tonne of bricks….

              Restaurants (and most other businesses) don’t pay GST

              Bernie pays GST on his mark-up that he adds to his “buy price”; Caroline pays GST on her mark-up that she adds to her “buy price”. etc.

              GST is a tax that every business collects on behalf of the government. You charge GST in your sales and income and claim it back for your purchases and expenses. You then calculate the difference in your GST return to work out if you have to make a GST payment to the IRD or if your receive a GST refund from the IRD.

              GST is paid at each transaction on the marginal value that is created in each transaction.

              If you have ever worked in business you would know how wrong your claim is

              • Anita

                [ugh – posting error – retyping]

                Um?

                Bernie pays GST on what he buys from Anna, and charges Caroline GST on what she buys from him. He then gets a refund from the govt for the GST he paid Anna, and pays them the GST he collected from Caroline. To reduce the insanity there is a single financial transaction, which is Bernie paying the difference between the two numbers.

                This means that Bernie does not pay GST (on his business expenses, he pays GST on movie tickets with his kids just liek the rest of us). Restaurants do not pay GST on the fruit and veg they buy (they pay it and have it refunded by the govt).

                This is exactly what I already said, and exactly how it is. Do you disagree?

                While you are correct that because the cost of components is (one hopes) lower than the cost of the product there is a difference between what Bernie pays and what Caroline pays, you are incorrect that the difference is paid by Bernie. He collects that difference (along with the GST on the raw cost component) from Caroline and then Caroline is refunded her entire payment by the govt. The person that actually pays the GST on the increase in value at each stage is the same person that pays the GST on the raw component cost: David, the guy having brekkie.

                BTW I have actually been involved in the business of paying, charging, refunding and paperworking GST for some time now.

        • frustration 13.1.1.2

          FFS This kind of fatuous statement makes you look silly Anita (and you’re not) – of course businesses pay GST if they are registered.

          What you are attempting to say is that businesses can get a GST refund for goods or services invoiced to them that include a GST component.

          The vast majority will also be net GST payers, assuming they sell more goods/services than they purchase – and if they aren’t they’ll either go out of business or be audited by the IRD.

          • joe bloggs 13.1.1.2.1

            many thanks frustration – right on the money

            If Bernie marks his eggs up then he collects and pays GST on that mark-up.

            Your restaurant will only avoid GST if it pays exactly the same value for all of its purchases as it charges for all of its sales – i.e. it’s a freakin’ non-profit organisation

            Anita, I’m an accountant and I strongly urge you to go back to accounting basics: put some numbers to your example and work out the money flow correctly …

            • Anita 13.1.1.2.1.1

              Anna charges $10 (excl) per tray of eggs.

              Bernie pays $11.25 (incl) for a tray of eggs. Anna gives $1.25 to the government which Bernie then claims back, meaning he pays… $10 and she gets … $10.

              Bernie charges $20 (excl) per tray of eggs. Caroline pays $22.50, Bernie gives $2.50 to the government, the government gives that $2.50 back to Caroline.

              Once all the payments and refunds have been processed:
              Anna gets $10
              Bernie pays $10, and gets $20 (a 100% mark-up).
              Caroline pays $20.

              No-one has yet actually paid any GST. Bernie has collected $2.50 on behalf of the government (as has Anna who collected $1.25), but that’s a very different thing from paying GST.

              When Caroline charges David (and his hordes of mountain biker mates) the equivalent of $40 (excl) per tray of eggs they pay $45. Caroline gives that $5 to the government, and David and his mates get refunded nothing.

              So the $1.25 GST on the original eggs is paid by … David
              The $1.25 GST on Bernie’s mark-up is paid by … David
              The $2.50 GST on Caroline’s mark-up is paid by … David.

              Anna, Bernie and Caroline collect GST on behalf of the government, but they don’t pay it themselves. The only cost to all of them is administrative overhead and general aggro of GST administration. The end consumer (David) pays the GST on every component, every value added service and every mark-up.

              P.S. Anyone who wants to quibble about the number of eggs eaten by a mountain biker can
              a) consider the advantage of round numbers
              b) go out to breakfast with any of the moutain bikers I know 🙂

          • Anita 13.1.1.2.2

            frustration,

            “the vast majority [of businesses] will also be net GST payers” no
            “the vast majority [of businesses] will also be net GST collectors” yes

            When I pay GST on the milk I buy from my dairy then I pay it and the dairy collects it. The money comes out of my pocket not theirs, their only cost is the administrative overhead of taking my money, holding it briefly, faffing about with GST returns, and then passing my money on to the government.

            • joe bloggs 13.1.1.2.2.1

              Anita you made a bald assertion that Restaurants (and most other businesses) don’t pay GST which is clearly wrong.

              In every transaction there is a collection of GST and a payment of GST.

              The outcome of netting these collections and payments is a GST burden for the final buyer in the chain of transactions but that is a completely different observation to your original assertion.

              • Anita

                I suspect we’re about to fall into a semantic argument about the meaning of the word “pay”. I say restaurants don’t pay GST (nor does the company I work for) because GST costs them nothing.

                For you to argue that they pay GST you also have to argue that my employer pays my income tax and the bank pays my rates. I would argue that, in both cases, I am the one that pays, they are simply performing a transaction.

                But anyway, to go back to pollywog’s original point… removing GST off fruit and veg will not benefit restaurants, because they don’t actually incur any costs from GST on fruit and veg.

              • pollywog

                sweet…so the answer then, is for families to register as a ‘restaurant’ business and claim all the GST back ?

              • Anita

                Sadly no 🙂

                Registering for GST is not quite that simple, but plenty of the self employed do claim back some interesting things 🙂

    • Bright Red 13.2

      Your calcs are out by an order of magnitude because you don’t understand the proposal.

      “reduction in GST from 15% back to 12.5% for fruit and vegetables would amount to 36 cents or less a week big deal!”

      That’s not the proposal. The proposal is to take all GST off fruit and vege – one ninth of $17 is nearly $2

      big deal? It’s more than many familes will get from National’s tax swap.

      • joe bloggs 13.2.1

        Oh crap BR, it may be your policy to remove all GST from fruit and vege but it isn’t Phil Goff’s.

        Phil can’t even promise to take GST back to 12.5%:

        PHIL GOFF interviewed by GUYON ESPINER

        GUYON Thank you Phil for joining us this morning, we really appreciate your time. Thursday’s Budget we’re almost certain to see a rise in GST to 15%. Now I know you’re looking possibly at some exemptions to GST, but can you say that Labour would restore the general level of GST back to 12%, should you be elected in 2011?

        PHIL GOFF – Opposition Leader
        No I can’t make that promise

        http://tvnz.co.nz/q-and-a-news/q-phil-goff-interview-3543882

  14. sean14 14

    I remember reading in a previous post by Marty G that the opposition, led by Phil Goff, is showing bold economic leadership.

    Based on the figured used in this post, the person/family on the lowest income bracket of $17600 per year spends $457.60 per year on fruit and vegetables.

    Assuming GST goes up to 15%, Phil Goff will reduce it to 12.5% for fruit and vegetables and the spend of that family/person remains the same before GST in nominal terms, that person/family will have an extra $11.44 per year to spend.

    Bold economic leadership?

    • Bright Red 14.1

      “Assuming GST goes up to 15%, Phil Goff will reduce it to 12.5% for fruit and vegetables and the spend of that family/person remains the same before GST in nominal terms, that person/family will have an extra $11.44 per year to spend.”

      that’s not the proposal. The proposal is to take all GST off fruit and vege.

      Your person spending $457.60 a year on fruit and vege at the current 12.5% GST rate stands to save $50 a year. Or, to put it another way, will be able to afford to by 11% more fruit and vege than now.

      • sean14 14.1.1

        My bad, Bright Red. In a lame attempt at salvaging some pride, I don’t see how $1 a week equates to bold economic leadership.

        • Bright Red 14.1.1.1

          and a very solid attempt too.

          I don’t think anyone suggests this is the only thing Goff is going to do. Also, remember that you’re talking $50 a year to a family with under $17,600 a year or $338 a week to spend. It’s effectively another day’s spending money.

  15. Jim 15

    OK

    Why do we have poor in NZ. Labour are definitely better than National on that score but really both parties have and continue to endorse policies that have created, entrenched wacked it to the poor.
    Our free trade policy has meant lowered wages. No employer here can afford to pay decent wages when slave labour imports are flooding our country. Those lower wages mean a lower tax take so our social services have less money. Then there is subsidisation of the low waged. Working for families, housing benefits, etc are necessessary because of low wages.

    The the icing on the cake is high rents and house prices caused by increasing our population by more than half a million people through imigration. The cost of increasing that population is astronomical in strained health services, roading etc.
    This has created wealth for some and also massive debt for other home owners who now consider themselves better than those who now cannot buy property in their own country due to the low wages caused by slave labour imports.
    Cheap imports and the resulting lowered wages have forced many young mothers into working 24 hours a day with no rest. When they get home from work like everyone else tey are exhausted but have to start cooking and cleaning and working weekends also. You have destroyed their quality of life as all many women now have time for is working, childcare and cleaning.

    Then ofcourse business is not really viable here anymore and because of that environment many small businessess here operate in debt.

    Workers have born the entire brunt of all these policies under a Labour government some of the rough edges have been taken off but if ojur country takes a hit and our risky dollar collapses we will have no industry here and half a million more people to pay benefits to.

    I was astyounded to learn that 90% of jobs here are created by small business. Why the hell are we opening up NZ to big foreign investors. We should start to close the free trade door gradually but surely and encourage the businesses that provide jobs here.
    We are a low wage economy by design.

    I’m just about ready to run for parliament and tell the people they are being impoverished by their own governments both Labour and National’s policies. But of course they know that already and its why labours support has collapsed and we are now at the mercy of the even worse “National Party”

    So applause to Labour for being a quite a bit better than National but you are still a disaster for NZ.

    If you want my vote for Labour I’ll accept the rest but get rid of the “Search and Surveylance act or the greens will be your replacement. You’ll be history if don’t completely scrap this policy. Not just watered down. You need to scrap it or you can gon join that dole cue which will be growing by the day and bigger than we can now manage on our reduced wages.

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