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No Right Turn on GST policy changes.

Written By: - Date published: 4:18 pm, September 27th, 2010 - 112 comments
Categories: food, gst, labour, tax - Tags:

It looks like No Right Turn has covered the GST on fruit and vegetables. Reproduced with permission.

Labour’s GST policy

Today Phil Goff committed to axing GST on fresh fruit and vegetables if elected. Good. While originally against this idea, I’ve changed my mind after seeing the evidence. According to research from Otago University’s public health department, removing GST from fresh fruit and vegetables increased consumption by 11%. For a country facing an obesity epidemic and an explosion of lifestyle diseases caused by the modern, sugar-rich diet, that seems like a worthwhile goal.

Critics will say the shift is complex and unworkable. Bullshit. Labour has a solid definition of what counts (“unprocessed” and “fruit or vegetable” – no space for quibbling over salad rolls or tinned beans there), and they’ve committed to providing the necessary support through IRD to make it painless and risk-free for business. The Australians can manage this. Are critics really saying we’re stupider than them?

Which really only leaves cost. This policy will cost $250 million a year. Labour says that will be “repaid many times over” from health savings, but that remains to be seen (those savings will also be long-term rather than short-term). Its a hefty cost, but not one that will break the bank, and whether we want to effectively spend money this way is simply a question of priorities. As Goff asks:

If it’s appropriate to put up the price of cigarettes by $200 million a year in tax because you want to discourage smoking, why wouldn’t you spend the same amount to reduce the price of healthy fruit and vegetables to encourage people to eat what is good for them?

(Though I’d put this as “enable” rather than encourage, a removal of a price barrier to healthy eating).

Though if we’re looking at ways of paying for it, here’s an idea: restore the top tax rate of 39% on the 3% of income earners who earn more than $100,000 a year. This would net more than $550 million a year – more than enough to pay for this change. Plus, it would be a “tax switch” which benefits the poor rather than the rich. Seems like a good idea to me…

Why we should remove GST from fresh fruit and veges

The Otago Daily Times summarises the empirical evidence on the effects of removing GST from fresh fruit and vegetables:

Professors Tony Blakely of the University of Otago, and Cliona Ni Mhuchu of the University of Auckland, gave the proposal cautious support as a move to improve health and reduce inequalities. “Earlier this year we published research showing an 11 percent increase in purchasing of fruit and vegetables when 12.5% was taken off the price,” Professor Ni Mhurchu said.

The finding was from a large randomised trial of 1,100 New Zealand shoppers, and published in the American Journal of Clinical Nutrition.

This increase equates to about half a kilo more fruits and vegetables per household each week, or about six extra servings.

That’s a pretty significant effect. As for those who doubt whether its worthwhile, it is worth noting that we already run a 5+ a day programme to encourage healthier eating. This goes beyond mere advocacy to enabling. It would mean the government is putting its money where its mouth is.

112 comments on “No Right Turn on GST policy changes.”

  1. roger nome 1

    Of course the right will say that it is an insult to the liberty of junk-food fans. If you take the GST of fruit and vegetables, why should people who love to eat crap not have the same treatment? and on and on and on.

    Come on Farrar – show us what pathetc trivialities your politics are made of!

    • Wait for repeated howls of “nanny state” to erupt any time soon.

      The only trouble is why shouldn’t Government do things to aid health? Why do some put dogma ahead of general health?

    • outofbed 1.2

      I agree whole heatedly with this policy although it falls short of the radical mold breaking shift that we need from Labour
      How about “we the labour party fully commit to Re Nationalizing the electricity generation sector
      and the resulting savings from the pseudo competition and company bureaucracies will be spent on keeping electricity prices down or for central planned investment in sustainable generation” (which would be better ;~) )
      Or, we are not going to subsidise the trucking industry to the same degree and instead of building white elephant roads we will invest heavily in coastal shipping and the infrastructure around that.
      or..
      I won’t hold my breath

      • Sigh 1.2.1

        Thing is they don’t actually have these ideas. Look at fibre to the home, a no brainer really for anyone who’d properly studied it, but Labour refused and refused and pursued expensive programme of unbundling and regulation and then refused and refused some more until finally National stole the ball. When it comes to smart ideas about transforming the economy they really have no original ideas whatsoever (that’s not saying that National do, they definitely don’t either, except for broadband they’ve shown to be a bunch of old fashioned fscking idiots on that front too).

        More young blood please. I want to see scientists, engineers, etc. in a New Zealand cabinet for once making educated decisions.

        • millsy 1.2.1.1

          Actually, Telecom offered to sell its fixed like network to the government, but for reasons only known to them, refused to buy it *rolls eyes*

          The broadband policy is the only thing that I think national is going a half-pie decent job on.

      • insider 1.2.2

        Have you not seen the paper today where the already nationalised monopoly transmission provider is wanting to heap hundreds of millions of extra $ on bills to pay for its engineering wet dreams.

        Is that the kind of example of keeping prices down by nationalised electricity companies?

        • BigSigh 1.2.2.1

          As someone with a bit of knowledge on that subject I have to defend Transpower. There has been a long (loooooong) period of underinvestment, and our grid is seriously stretched. (And my praise to the skills of the many employees there who’ve kept it running despite this.) We can spend money upgrading the grid, or we can simply to turn the lights out, I know what I want in this case. FWIW they’re not alone, this kind of mismanagement has been a problem worldwide.

          (That said, they do get some of their projects horribly wrong due to some seriously old fashioned thinking and dead wood in the wrong positions.)

  2. The Otago research provides empirical evidence only for the theory that publicising a discounted price encourages people to buy more product. This is a phenomenon not unknown to people who sell things for a living, but is not really relevant to the question of whether removing GST from particular products would encourage sales. Unfortunately, this kind of “evidence” is all too common in the social sciences.

    • bbfloyd 2.1

      i can tell you right now what an effect it has. having lived in australia under their gst regime. i was working sporadically as amusician, and receiving the dole when gigs dried up. i was able to afford to eat properly while on the dole.

      that is not something i would be able to do here. considering the crap wages payed here, eating properly has become an unaffordable luxury. even basic food items are getting too expensive for some, if not most beneficiaries here.

      having felt the effects of eating poor quality diets for a period, i can attest to the reality of the side effects. if the national government’s policy is to create massive health issues(cholesterol, blood pressure, digestion, bowel/intestinal problems,etc), then i would have to congratulate them on a job well done…

      and please, don’t anyone try the govt spin that food prices havn’t gone up to a ridiculous degree. every time i go into a supermarket, the prices have shifted. day by day, fruit and vegetables at times being almost out of range depending on the season. (ozzy tomatoes$14.00kg).

      it’s not far short of the point where we will start having the same diseases associated with malnutrition that we expect to hear from african countries. IN NZ!!! that is just so unnecessary, but the stanley(key) govt just don’t seem to give a stuff…

      • insider 2.1.1

        “fruit and vegetables at times being almost out of range depending on the season”

        Have you ever thought that the words ‘depending on the season’ may give a clue as to why prices vary?

        So how much should Australian tomatoes bought out of season in NZ cost?

        I remember a couple of years ago when Q’land bananas cost over $10kg in Melbourne. It was a crime against the people

        • bbfloyd 2.1.1.1

          australian tomatoes shouldn’t be imported fullstop. the time it takes to transport them means they are green when picked, and therefore have very little of the nutrient they would have if ripe.. we have hydroponic tomatoes grown here in mangere..we hav the capacity to produce all our own food. where is the investment in year long vegetable production? the point you have missed is that that price is beyond a hell of a lot of people to sustain. they may as well be$25.00kg for all the good it will do for those people.

          and that was simply one example… if you cared to check, the number of examples that would be just as relevant would be countless at present.

          and yes. for locally grown product to be that expensive is criminal greed at work. (bananas)

          • Jilly Bee 2.1.1.1.1

            Australian tomatoes look awful and artificial in the supermarket during the winter months, compared to what they look like at Aussie markets, I never purchase them. I buy heaps of fruit and veges – we don’t have the room to grow that many veges and will be happy with a small decrease in the cost. I also think that fat laden take-away meals could well do with an extra ‘fat tax’ – OMG nanny state, but probably the admin costs may outweigh the benefits.

            • Lanthanide 2.1.1.1.1.1

              “Australian tomatoes look awful and artificial in the supermarket during the winter months, compared to what they look like at Aussie markets”
              They probably have to export the varieties that keep the best, and often have worse taste as a result.

              I noticed for a while that strawberries you bought in stores were always huge, but flavourless. This last year however they seem to have woken up and have gone back to a smaller and much tastier variety.

  3. Lanthanide 3

    It seems to have struck a chord on stuff, with 48% in favour (on a normally right-leaning site).

    I’m unconvinced in that it seems like a very small amount that the average person is going to be saving, even with the rate going to 15%. It is also going to add costs for businesses, not from “determining which foods count and which don’t” as their definition is apparently solid, but accounting systems are now going to have to account for supplies bought and sold that do not have a GST portion attached to them. Currently almost everything has GST for which you get a refund from the government and in turn charge your customers, but now there will be a small class which is exempt, and that’ll require yet another software upgrade.

    • Vicky32 3.1

      My heart bleeds. Poor supermarket chains! Don’t be ridiculous. All supermarkets are owned by one of two multi-nationals. No software upgrade is going to kill them…
      Deb

      • Roger 3.1.1

        It shouldn’t be too hard. Fruit and vegetables are sold in a department separate from others. The logistics chain is separate from other goods, and the management from head offices is done by people that focus primarily on that department, same as all others. It won’t be difficult.

      • Lanthanide 3.1.2

        Chain supermarkets aren’t the only ones that sell fresh fruit and vegetables, you know.

        • Vicky32 3.1.2.1

          Even so, your specialty shop or local dairy are not going to be broken by the costs of compliance with this change! (In fact, I can imagine the owners of my local convenience shop being quite happy about it, they’d sell more!) It’s simple enough that even people who have English as a second language, can grasp it, after all – unless they don’t want to understand!
          Are you sure you’re a lefty Lanth?

          • Lanthanide 3.1.2.1.1

            You seem to be mis-interpreting what I’ve said. I’ll put it in bullet points:
            1. The dollar cost of this is not going to be very significant for the average family, week to week
            2. It will cost companies more in compliance to move to software systems that can handle variable GST per product

            Nowhere did I say #2 was such a crippling cost as to make the whole idea unworkable. I just think the combination of 1 and 2 together overall mean this doesn’t strike me as a particularly good way to be spending $250m.

            Also, I think your local convenience shop are unlikely to drop their prices significantly. They trade on convenience and already charge higher prices, so there’s really no incentive for them to drop their prices much if you’re already going there and don’t mind the high prices to begin with.

            • felix 3.1.2.1.1.1

              I’ll bullet point it properly for you:

              *1. It will save people a little bit, the savings mainly helping the poorest
              *2. It will cost fuck all in compliance, the fuck all mainly imposed on the richest

              The rest of your comment is twaddle. My local vege shops will be able to drop all of their prices by 15%. You think they’ll suddenly lose interest in competing with each other?

              • Lanthanide

                Sorry, my definition of ‘convenience store’ is the corner dairy or mini-mart that charges through the nose, or the small regional supermarkets like 4-square and supervalue, not a green-grocery/growers market.

                “It will cost fuck all in compliance, the fuck all mainly imposed on the richest”
                Because businesses never pass on their increased costs to their customers?

                • jcuknz

                  People who use the f… word know sfa all and are quite stupid.
                  [That’s Fanny not f…]

                • felix

                  Lanth,

                  ah I see we were indeed talking about two very different types of shops.

                  Yes, the starmarts et al will keep gouging as always. Not so sure about the 4-squares and the like – out here in the provinces they tend to be pretty aware of the need to keep on side with their local communities.

                  jcuknz: go fuck yourself, I’ll use any language I like.

            • mcflock 3.1.2.1.1.2

              The average family might not notice it – but those on lower incomes will feel it.

              I know, it’s an alien concept these days for a government to do something that will help the poor more than the middle classes, even Labour find it difficult. But cutting GST has benefits that trickle up…

  4. tsmithfield 4

    The problems are:

    1. Minimal actual benefit in dollar terms.
    2. Higher cost of compliance and complexity for businesses.
    3. Businesses may not necessarily pass on the GST decrease.

    • bbfloyd 4.1

      how can you quantify dollar values in the short term? you can’t, because the payoff is long term. in ten years, how do you measure the net gains from people who don’t need medical care because their diet isn’t killing them?

      we have a very good model to follow already over the tasman… whinging aside, the system they have there is working well. most of the complaints were borne of laziness, greed, or ideology. which fizzled out once everything was debugged. all we need to do is check out what they did right and follow.

      public education went a long way to stopping profiteering in it’s tracks. the govt set up call centers so that members of the public could blow the whistle on that, and prosecutions followed. but by far more effective is giving the consumer the information required to make discerning choices.

      so if you are spending $150.00 per week feeding your family, then you would consider a $25-30.00 saving to be minimal? tell that to every solo mum, and family surviving on a benifit!! be prepared to be ridiculed..

      • felix 4.1.1

        Some of these guys don’t know you can get money in denominations of less than a c note.

        $25 isn’t a countable amount to them.

      • Lanthanide 4.1.2

        If you’re spending $150/week feeding a family and you’re going to get $25-30 back from this GST change alone, you must be eating a lot of salads.

        Another angle of attack on tsmithfield’s point should be considered, however: the average voter may say “$6 week saved on fresh fruit and vegetables? who cares? why would I vote Labour just for that?”.

        • Herodotus 4.1.2.1

          Lant – to get $6/week you have to have a household income greater than $132k p.a.. There are aloyt of voters on that income who will vote based on a $6/week savings from Lab. Especially as most on that income have mechamisms that, given thanks to Lab & Nat greater tax minimising vehicles. Remember 50 on the rich list who don’t even pay the top tax braket. the avg voter/household will benefit by $2/week. For a election bribe/promise it is min cost for the PR and media coverage it will get. If you want my vote either a bigger bribe (I sell my vote for far more that $2/week and no vision) or perhaps something radical and a stragety that may cost be in the pay packet BUT I can see something holistic benefiting the country and our future.

          No future for meeeeeeeeee 😉

        • felix 4.1.2.2

          Is this going to be labour’s only policy going into the next election? If not, what does the word “just” mean in your comment?

          • Lanthanide 4.1.2.2.1

            It means what people are thinking about today, now that Labour has announced their first big policy. It is hardly one that captures people’s imaginations, so I wouldn’t expect to see much, if any, poll bump from this.

            • felix 4.1.2.2.1.1

              Fascinating.

              • Lanthanide

                First impressions count. If people write this change off as being irrelevant, that impression may stick. Especially if they buy into National’s attack lines against it.

            • Blue 4.1.2.2.1.2

              I’m happy Labour has announced a policy. I’m happy that it’s one that will attract public attention and debate. I’m not totally sold on how much it might save the average family a week.

              But I am quite happy that it makes Bill English look like a penny pinching accountant with no grasp of anything other than pointy-headed number-crunching.

              The kind of thinking that this policy represents has been absent from NZ political discussion for so long now. It’s something that’s aimed at trying to help those who are struggling, not rewarding those who already have enough to get by comfortably. Something that’s not just about numbers on a spreadsheet but about a vision for transforming the quality of life in New Zealand in the future.

              I didn’t realise just how absent that’s been until now, and I think the public might just enjoy their first taste of something different too.

              • rosy

                Agree. For the ‘tax switch’ the rich are benefiting and the poor are getting only marginal benefits yet it’s being sold to them as better than nothing. On the otherhand this policy can potentially benefit the poor more than the rich (percentage of their spending) and it’s being denounced as underwhelming. $3/week can’t be both not worth it and worth it. In both cases these are indicators of intention – i.e to redistribute wealth to different sectors. The fruit and veg policy can however only be a start of redistributing for a more equitable society.

            • Vicky32 4.1.2.2.1.3

              Speak for yourself, Lanth! If you were one of the people living close to disaster every week, or even knew anyone who is, you wouldn’t be so dismissive.
              Deb

      • tsmithfield 4.1.3

        Except not many families spend anything like $150 on fresh fruit and vegetables. A lot would spend $20 or less.

        • felix 4.1.3.1

          We should probably find ways to make them more affordable then.

          • factchecker 4.1.3.1.1

            People like eating shit mmkay, because they’re lazy fuckwits mmkay

            http://www.stuff.co.nz/oddstuff/4171676/KFC-opening-causes-traffic-jam

          • tsmithfield 4.1.3.1.2

            If they spend $20 on F & V now, removing GST will save them $3. Hardly a huge incentive.
            The other problem is there is absolutely no guarantee that stores won’t just keep prices the same and pocket the difference.

            But why stop at fresh F & V? What about frozen ones that can be just as good?

            Why not take the GST off everything that can be potentially healthy? e.g. Gym memberships, bicycles, running shoes, nutritional supplements etc etc.

            • felix 4.1.3.1.2.1

              Probably no point doing anything much ever then ts. Can’t make everything perfect in one swoop so fuck it, just do nothing.

            • Vicky32 4.1.3.1.2.2

              “If they spend $20 on F & V now, removing GST will save them $3. ”
              Marie Antoinette got shafted for similar ignorance! (Yes, I know it wasn’t actually her who said it, but I don’t wanna havta do a long explanation, some times it’s just simpler to go with the common misconception, hey?)
              “The other problem is there is absolutely no guarantee that stores won’t just keep prices the same and pocket the difference. ”
              Stores, yes, shops may well be different…

    • Zeebop 4.2

      The problems are:

      1. Minimal actual benefit in dollar terms.

      Wrong. GST intake with jump 20%. Why not raise it to 20% or 50% GST?
      Because obviously its inflationary, which makes it more expensive to do business!
      Second, you hand to mouth benefit receiver is still going to have to pay more
      since businesses still have costs that will rise – its inflationary!

      2. Higher cost of compliance and complexity for businesses.

      This is a naff argument, all businesses pay heaps of taxes and a minefield
      of hazards, but worse! Not counting GST is actually a relaxation of taxation
      compilance. How can something you stop doing be an additional cost!

      3. Businesses may not necessarily pass on the GST decrease.
      Yes, businesses in fruit and vegies, competing against a man selling
      it off the back of a horse drawn wagon are going to price themselves
      out of the market.

      Sorry but I seriously wonder at the education of kiwis, they seem to just
      have been educated to come up with obstacles to change but never follow
      through on the consequences and take a first guess approach that keeps the
      status quo. Because one thing is for sure, they damn won’t change anything
      that might help their economy. Now if it harms it, sure, where do they sign up.

  5. Ari 5

    It’s also a bit less clear whether the increased consumption is from wider consumption of fresh fruit and vegetables, or simply increased consumption from those already buying them, which is currently mostly the richer segments of society, unfortunately.

  6. Herodotus 6

    As I have commented many time previously on thelack of benefit to a family $2/week. There also is the question how do we know if the 15% GST will be passed down or absorbed by the m,any layers of invovlement within the industry growers, transport, supermarkets etc.?
    On a more minor issue how also will we know if these exceptions to GSt will be the beginning, widdle and end?
    Say The Caledonia party hold power next election that part of their platform was GST removal from rolled oates/ porridge and single malt whisky 🙂 mmmm.
    A policy that has few exceptions (rent, fines, bank charges and interest) works well. If it is that those atthe lower level of income need assistance then act on the issue increase welfare, min wage etc.
    If it is health needs saving a couple of $ will not in my mind change eating habits. there neds an extensive health and budgeting education package. The horse and water come to mind.
    This is not the panacea for the cure of obesity and for this to have the following comment ” This policy will cost $250 million a year. Labour says that will be “repaid many times over” from health savings,” I agree with “The Standard” commentator as to being (more) skeptical (Anyone watch the video yet from previous post I wish to let the youtube clip reach 10,000 hits !!! 😉 regarding the payback in real terms not some Labour spokesman. saving $2 will not change eating or health outcomes. If Lab expects this then just continual with Nat and tinker not to address the REAL issues.

    • bbfloyd 6.1

      this is meaningless semantics… seems like every conspiracy theory rolled into one. the numbers you quote are insultingly inaccurate, and assuming everyone else would be as intractable as yourself given the opportunity to change their family’s eating habits is short sighted to say the least.

      word to the wise… the status quo is not immutable….

      • Herodotus 6.1.1

        For someone who has never put up any nos I find your trolling very shallow check dept of ststs to verify my nos, where is your links to behavioural changes by price???? 😉
        p.s Even invisible phil cannot read families saving $6/week to be on this yo would have to eanr greater than $132k. Nice to see Phil quoting how much the wealthiest will save to justify this policy, and who was it commenting re Nat tax policies for the few not the many heres looking back at you Phil, just priceless.
        http://www.stats.govt.nz/tools_and_services/tools/TableBuilder/household-economic-statistics.aspx

        • bbfloyd 6.1.1.1

          Hero.. YOU… calling me a troll…. that’s the funniest thing i’ve heard you say yet. and that is saying nothing yet.

          life is not all about numbers and money flyboy.. if you actually thought with your big head about what i said, then you would, possibly realise what my post was about.. don’t forget the old maxim….”there are lies, damn lies, and then there are statistics”.

          i live in the real world. and that qualifies me to comment on what i see every day. and what i experience. no amount of playing with numbers will convince me that black is white, or vise versa.

      • Herodotus 6.1.2

        bbf if my numbers are inaccurate then you have concerns regarding the Dept of Stats?
        As per the Dept of Stats (Many links I have already provided yet to see one of yours disproving our Govt dept) the average household spend on F&V IS $18.40 incl of 12.5% GST or $2.04 GST component. No how about put up regarding my/govt stats inaccurant numbers.
        Or are you Phil G quoting the top 5% household income to justify the $6/week savings that the likes of Eric Watson, Hitchens and coy will recieve from this, Labours policy?

        • bbfloyd 6.1.2.1

          laughably inaccurate figures… still relying on the numbers.. don’t you have any ideas outside the “bottom line”? govt stats show food prices going up less than 1% last year.. you’ll get a laugh with that one down at the local winz office..

          • Herodotus 6.1.2.1.1

            Wher else do you go. Other nos that may interest you
            Still if you are happy and taken in by Phils $6/week and think that this applies to you and most other NZ it may be beneficial to review weekly spend. Most will be taken back by how little they spend on Freash F&V. This is not about what is good for the public, this is all about politics and the win:loss game Lab and NAts play with us.
            You like myself are in the real world, but we are 1 of 4+m. So where else do we get numbers to question policy on, or do we just take it that “our” side are always telling us the truth with facts. These need to be tested, and sometimes we find that the mesages are WRONG!!! Just like how we are being oversold the benefit of this policy, and we are being oversold this in a big way.
            Increases in F&V over last 3 years CPI figures
            2007-08 23.4% increase
            2008-09 7.6% decrease
            2009.-10 2.3 increase

          • Herodotus 6.1.2.1.2

            You may be either correct and the nos are not telling the picture or an orstrich. Either way does not matter as these numbers contribute to the decision making of the reserve banks policy and Nat and LAbs policies and costings. So they do matter as the are integral in what does affect us directly e.g. as in interest rates, value of NZ dollar etc.

  7. insider 7

    It also ignores the research that ‘fresh’ fruit and vegetables are not always best. Why give favourable treatment to a non optimal product.

    AS for a “solid definition of what counts (“unprocessed” and “fruit or vegetable” – no space for quibbling over salad rolls or tinned beans there)”. Why does I/S have such little faith in lawyers? Has he never met one?

    I have no doubt this can be done technically, I’d expect its admin to cost to be far far less than $250m. But I can’t see the point in terms of fitting a policy need; and I think you can do an awful lot of health good to the bits of society that probably need diet help with a targeted $250m than with a scattergun approach. As a bonus for labour that would probably be their core constituency.

    • bbfloyd 7.1

      Insider..you have just demonstrated exactly, one of the issues brought up, and dealt with relatively easily in aust.

      i’m sure you understand that time never stands still. neither does human development. so we can assume that the issue of “definitions”, would be worked through over the time period that exists between now, and the beginning of the implementation process. and as we have an excellent set of examples to follow from australia’s implementation process, which highlighted it’s weaknesses early and clearly and allowed the govt to get a regime in place that, no liberal me, have to admit works reasonably well.

      our situation isn’t totally alike, but there is enough past experience to call on in avoiding the worst of the pitfalls early.

      to me the opportunity this presents is too important to reduce it to a money crunching lolly scramble. as a tool to augment education initiatives designed to “futureproof ” the health levels of the lower echelons of our society, this would be useful.

      it will be our grandchildren and great grandchildren who thank this generation. personally, i would rather that than having our names cursed for doing nothing when there was still time.

  8. gingercrush 8

    Sorry but where does this idea that online polls favour the right. Authors and commentators here consistently use that line to support anything where the poll tends to be evenly spread or tilts in favour of whatever the author/commentators opinion of the subject is. None of you have proof that actually takes place either, you just believe that to be the case.

    Anyway stupid pointless exercise. And that stuff poll is a stupid question anyway. It should simply be. “Do you support no GST on Fruit and Vegetables. Answer yes and no.

    Instead we get a seriously twisted and stupid question instead and the way to answer no is basically, “Nanny state social engineering”. I don’t see it as that. I just think its stupid. End of.

    And just as most studies around price increases on alcohol and tobacco have proved to be entirely stupid so too is a stupid study into the decrease of GST on Fruit and Vegetables.

    • felix 8.1

      Sorry but where does this idea that online polls favour the right.

      From looking at online poll results?

      • Roger 8.1.1

        Also the fact that people without access to the internet are mostly left leaning. Of the ones that do have access, considering the large numbers that participate during normal business hours, a higher proportion of left leaning people are likely to be in workplaces where they do not have access to the internet. They are too busy producing actual goods and services while the RWNJs are on the internet in their nice offices.

    • Maynard J 8.2

      Did you vote it as Nanny state blah blah anyway, as anyone who is opposed to the policy or is anti-Labour would vote?

    • bbfloyd 8.3

      GingerNut… was getting bored, so i read your post. disappointed, you only got six stupids in there.

      stupid computer, took me three goes to spell stupid,, stupid spellchecker,, stupid yanks, can’t spell.

  9. Zeebop 9

    UK, OZ both have CGT and GST off food, books, and baby stuff.

    NZ has no CGT, speculators running the country, and poverty, crime, inequality
    and exporting our skilled young adults because its more expensive here, to eat,
    to get educated and to bring up babies.

    Now MSM doesn’t want to make the connection for people, less the right
    look like the shrill liars they are. If you want a richer country you need a
    richer diverse population that doesn’t rely on one or two industries. That
    means building a first world nation not a third world free for all.

    The right doesn’t want to govern because the wealth are already making
    money enough for themselves. That is not government that is gridlock.

  10. Seti 10

    The problem is the seasonal price fluctuations that affect fruit and vegetables. A lettuce is circa $3.50 currently and around $1.50 when supplys a plenty. So a 13% reduction with gst excluded reduces the price to $3.06/$1.31. I hardly think such a difference will cause a revolution in nutrional eating habits when seasonality induces such wide variances.

    • bbfloyd 10.1

      if all you eat a week is one lettuce, then you would be perfectly right. very thin, but correct. so what else would you feed your kids during the week? maybe two lettuces?

      i think calling this a “revolution” in eating habits is an overreaction. therefore writing it off simply because it isn’t “dramatic” is misguided. the vast majority of people who got their tax cut will lose most, if not all with the corresponding raise in costs. do i hear people saying we shouldn’t have them?

      as a single plank in a complete platform of reform, this can be seen as an important, and necessary component in a realistic approach to public health.

  11. bbfloyd 11

    another aspect not canvassed her,as far as i’ve noted anyway, is that seasonal price fluctuations, at present mean that for a part of the year, fresh fruit and veg are out of reach for some.(a growing number). so am i to assume that people are arguing it is acceptable that good diet is something poor people can’t have for part of every year?

    so for four or five months you eat all the good stuff you can so that, with luck, the effects on your physiology from the substandard diet the rest of the year can somehow be negated? does anyone else see the weakness in this approach?

    • Herodotus 11.1

      In winter you tranfer your eating habits “generally” from fruit to veges. Broccoli, potatoes,leeks and the like. and bbf just for you a link 😉
      Also as times have toughened people are growingthere own, thus reducing the savings from this policy. Unless Lab gets the grand idea to remove GST from seeds and other garden assoc costs that assist in the cutlivating of food. Or would that be too deep for a Lab/nat/Govt policy to go more than skin deep and a good 20sec sound bite??
      http://www.garden-nz.co.nz/home/interests/winter-vegetables-2.html

      • Vicky32 11.1.1

        “In winter you tranfer your eating habits “generally” from fruit to veges. Broccoli, potatoes,leeks and the like”
        What’s your point? Broccoli, potatoes and leeks (eeuuww!) are still veges, and still bl**dy expensive!
        Deb

        • Herodotus 11.1.1.1

          My point was intended to be that we have to modify our eating habbits to be able to benefit from low cost price of F&V. Eating salads all year round has a high cost attributed to it over winter and spring. Coloured peppers are another example, if you buy on price the salad may not look pretty but still tatses the same. Red, Yellow, Orange over the year the different colours can cost 2-3 times as much as the cheaper ones at the same time.
          Broccoli is very inexpensive during the year, thought the cheese sauce is very quiking pricing itself out of the budget as it did 3 years ago. Then there is the suede or turnip. Unfortunately eating within a budget,healithily and in season has its limits on what the taste buds appreciate. many also forget that some are not as fiortunate to live in Jafaland with many supermarkets, F&V shops close buy and are dependant upon a single supermarket source for food. I have noticed even the weekend farmers markets are getting up there in price
          Bon Appetit

          • Lanthanide 11.1.1.1.1

            I’ve discovered a very nice drizzle you can put over steamed vegetables of any type to jazz them up a bit. Basically lemon or lime juice, butter, little salt and pepper. You only need 2 tablespoons each of butter and the juice and 1/4t salt/pepper (or to taste). Can throw in a little sugar too. It doesn’t seem like much volume at all, but it goes a long way. Stick it in a pot and heat till it boils, then take off and drizzle over the vegetables.

      • bbfloyd 11.1.2

        thanks for the pointless link Hero.. actually, my tastes don’t change over the course of the year on a cyclical basis. and indeed, with the wonders of modern technology we don’t need to become captive by the seasons.

        and how many people are ther living in auckland with A; the money to spend on setting up a kitchen garden? B; the ground space to plant it, and C; the knowledge to make it work continuously. how much would your average city dweller know about crop rotation?

        to make a twelve month garden work, you would need to set up a greenhouse at the least. they aren’t cheap. then you would have to be a homeowner, or have obtained permission from your landlord to use his property for that.

        hydroponics, or at least growing in soil under lights is an excellent alternative, and as long as you know what you’re doing, very efficient…. how many people have got the technical expertise to make that work?

        we musn’t forget, in the rush to critique, that this policy is obviously aimed at the urban centers where the bulk of the population dwell. space is at a ever higher premium year by year.

        we could always get a bit socialistic and look at cooperative endeavors.. (neighborhood allotments). turning small parks into little market gardens for the local areas. that would work as long as it was approached in a sensible manner.

        • felix 11.1.2.1

          It doesn’t have to be “teh awesomest garden in auckland” from day one.

          Gardening just isn’t like that. It’s a lifelong learning process. You won’t have every veg you desire right now just cos that’s what you feel like tonight.

          You learn to think about food in a different way. You learn to measure time in increments of seasons rather than meals. You learn an incredible amount of ways to cook the same veges again and again without getting bored (and you learn what other people near you are growing and swap with them). You learn an entirely new definition for the term “convenience food”.

          It takes time and effort to get to a point where you can eat substantial amounts from your own garden, but even a little bit is rewarding.

          Start small. Lettuces are easy. Read. Keep notes. Talk to the oldies in your street. Don’t expect it all to happen at once.

          But mostly, don’t be put off just because you can’t grow absolutely everything you want all year round.

    • Lanthanide 11.2

      Eating seasonally-priced foods doesn’t mean in winter that you can’t eat healthily. It just means you eat cabbage instead of lettuce, and broccoli instead of tomatoes. Or, if you really MUST have your particular vegetable, you get a small greenhouse (can be easily bought at The Warehouse) and grow your own small supply over winter.

      captcha: opportunity

      • bbfloyd 11.2.1

        L.. an idea i would love to implement.. unfortunately, i can’t where i live.. and the assumption that everyone can afford the outlay to set up a green house would be unrealistic. to say nothing of the skills and knowledge required to make it work properly.

        • Lanthanide 11.2.1.1

          Small greenhouse from the warehouse for $45: http://www.thewarehouse.co.nz/red/catalog/product/Westminster-2-Tier-Green-House-with-PE-Cover-97cm-x-69cm-x-49cm?SKU=1207294
          There’s a much more substantial one there fore $65, also.

          Sure, it’s not going to give you buckets of food, but I did say “small supply” there.

          As for skills and knowledge, yes, it’s entirely an opportunity cost. Take the time to develop the knowledge and grow your own and save $, or pay $$ at the shops when you insist on buying out of season produce.

          There is still nothing stopping someone from buying in-season produce at affordable prices. Some things, like potatoes, onions and carrots are pretty cheap year-round as well.

          • bbfloyd 11.2.1.1.1

            L … yes, i’ve seen them. good for hobby gardens and herbs, but pointless if you actually want to produce enough to count. i actually considered buying one a while ago, but the space just isn’t adequate. i decided that i could grow all the veges i wanted using an indoor setup. if only it wasn’t so risky going to hydroponic supply shops. i can see the headline now “police bust illicit capsicum plantation”..

            thing is though, i have knowledge gathered over years of experience. where does that leave a novice? making expensive mistakes untill they either get it right, or give up.
            I agree 100%that growing ones own vegetables and fruit is the best way to go. nutritionally as well as cost. it is the availability of usable land in the cities that is a major impediment. or should i say land that is not owned by private interests that would see no profit in allowing the ground to be used for these purposes.

          • bbfloyd 11.2.1.1.2

            small point L.. normally i would agree with you on the spuds, onions and carrots.. but this year has been an odd one for that. for the first time i have been having to shop around for even those basic items.. i’ve found that the chinese grocery stores are the best for that. i’m curious to know how they manage to undercut the supermarkets like that.

            don’t like to think our wonderful supermarket chains are gouging us..

            • Lanthanide 11.2.1.1.2.1

              Onions and carrots seem to have been about constant for me, and I do go through quite a lot of both. As for potatoes I normally only buy the 2.5kg roasting potatoes, probably what many would consider ‘gourmet’. They’re certainly more expensive per kg than buying a big 10kg bag of no-name ones, but I simply don’t eat potatoes often enough to get through 10kg before they go bad (sometimes I don’t even manage the 2.5kg bags). The price of those is pretty constant, too.

              As for the small greenhouses, yes, they aren’t going to provide a substantial proportion of your calory needs, especially for a family. But for a single or a couple they aren’t bad, especially if you go for vegetables that are pretty expensive, like spring onions and capsicum, or tomatoes (get the small cherry tomato or ‘bush’ varieties). This year I’ve set out to grow my own capsicums, so far I’ve thrown out 2 lots of seedlings as they died, but I think it’s ’cause I had the temperature up too high on the propagator. 3rd time might be my lucky one. From 10 plants I expect to get maybe 20 medium sized fruit, and that’ll make it worth it for me.

              • bbfloyd

                and they are gonna taste great! but i think you might be underestimating your yield. you can harvest capsicum for ages. two plants should give you plenty for a couple of months. giving yourself a small space between seedtray and heating pad should help with the seedling problem. if you can get hold of 20 litre buckets you can grow enough spuds in three or four to feed three or four people for months.

                i can already see the benifits of goff’s announcement. if we can have this conversation considering the relative disparity of our respective leanings, then how much of this is going on everywhere else? i can see it… two guys having a punch up in a ponsomby bar over a disagreement about the right fertilizer for courgettes..

                yea i know… silly, but you gotta admit it’s a goodness to get people really thinking about getting back to the soil, and getting the buzz from the good food. whatever else, it’s a nudge in a good direction.

  12. gobsmacked 12

    Policy, schmolicy.

    Folks, we’re living in New Keyland, where “explaining is losing”. It’s a headline-grabber, easy to understand, fills a political news vacuum in the recess, goes down well in Mana by-election, etc. So yes, it’s A Good Thing.

    Sure, I’d like all the details to stand up to rigorous scrutiny as well. Maybe they do, I dunno. But hang on, what did I say … “rigorous scrutiny”? It’s New Keyland, folks! The emptiest leader in history is also the most popular leader in history. Tragic, but true.

    What details did Key deliver in opposition? His policy on GST? “It won’t go up”. His policy on kids’ health? “Helen, hands off our pies!” His policy on low income families? “A ride in my car to Waitangi!”

    And nobody bothered to ask any more about it.

    Labour have spent far too long trying to play chess when the media can barely handle noughts and crosses. So give ’em the games they want.

    What was on the TV news tonight? A nice big picture of fruit and veges, some cute kids with apples and a couple of voters outside the supermarket saying they’d like cheaper shopping, please. Plus, Bill English … Labour’s best weapon.

    Well done, Phil.

    • bbfloyd 12.1

      G S… wouldn’t it be nice ……… if NZ’ers could actually debate important issues like real grownups..but then.. i’m not sure i’ve ever met a real grownup..

      • Herodotus 12.1.1

        Still awaiting some response re comment 6.1.2 or do I take the victory by default 🙂

        [lprent: It would be a bad idea. I wouldn’t like it – all of the most irritating flame-wars that I’ve had inflicted on my sensitive eyes tend to start that way. I find that making the perpetrator leave the places that I have to read tends to cheer me up. ]

    • pollywog 12.2

      It’s a headline-grabber, easy to understand, fills a political news vacuum in the recess, goes down well in Mana by-election, etc.

      Fa’afoi owes me a feed if he’s gonna pimp this policy and be damn sure i’m gonna upsize it to big boy status as well

      Goff still managed to look like a chump while he was delivering the good news though but did ya see those cold sores on Blinglishs bottom lip ?

      Stress gettin to ya Billy boy ? Be thankful you’re not pulling dead lambs outta the muck back ‘home’.

      • Loota 12.2.1

        Goff still managed to look like a chump while he was delivering the good news though but did ya see those cold sores on Blinglishs bottom lip ?

        Stress gettin to ya Billy boy ? Be thankful you’re not pulling dead lambs outta the muck back ‘home’.

        I think life is going to get more challenging for Bill as the months roll on by. For both Bill and John, actually.

        • pollywog 12.2.1.1

          True…

          if i was a rich white mofo politician, i’d prolly be trying to rape the economy and pocket as much loose change as i can from any dodgy dealings with big business, then quit soon as in a blaze of glory and push for a knighthood so i can retire to some tropical idyllic Pacific island and lord it over the natives in true colonial style…nah j/k

          Anyone else pickin as soon as Blinglish leaves the big house he’s gonna sell up the dipton estate and bail overseas before the inks dry on his resignation letter ?

  13. millsy 13

    Have to side with the right on this one boys and girls…

    Stupid policy.

    And the left lap it up like cats in a Christchurch dairy.

    Knowing that they can so sooo much better.

    I guess I am an honarary right winger today…

    Unions are evil, recriminalise homosexuality, etc…

  14. Herodotus 14

    Earlier this year we published research showing an 11 percent increase in purchasing of fruit and vegetables when 12.5% was taken off the price,” Professor Ni Mhurchu said.
    It would be interesting to know if Pro Ni Mhurchus conclusions were confirmed when his data is compared to the 2007-08 and 2008-09 June years as in those 2 years the change in price of F&V was 23% and -7.6% respectively for those years, just to see the model of his price elasticity to actual data. 😉

  15. bbfloyd 15

    refer 6.1, and add “assumption being the mother of all cock ups”

  16. Drakula 16

    GST. A RIPP OFF ! ! !

    I think that taking GST off fruit and vegitables is a very good idea but it does not go far enough; Do we pay GST on our RATES?????? like sewage, water and roading service?

    If so then that is a tax on a tax, and therefore is immoral!!!!!!!!!!

    I would like to see the end of GST period as it is a flat tax and totaly unjust; those who have a business can claim on their expences, those who don’t, can’t.

    Is that fair? Can workers claim on their bus ticket to work? shoes? cloths? etc.etc.

    With GST there are a lot of anomalies, I think it should be all, or nothing.

    I say get rid of it and replace it with a capital gains tax and to pump that money into building accommodation.

    NB Ijust looked up my council rates and we do pay GST on rates.

    • Vicky32 16.1

      I do agree with you Drakula – GST is inherently unfair and always has been. But no party will ever have the courage to even think about abolition of GST…
      Deb

  17. peterlepaysan 17

    Fruit and vegetables are basically sugar and water.
    Why not take gst off soda pops and frut juices and “cordials”?

    Labour has done some very stupid things but this has got to be the stupidest.

    Trust the Standard to back it!

    • felix 17.1

      Wow that is so fail.

      They’re mostly carbon too peter. Should just take gst off everything with carbon in it.

      • factchecker 17.1.1

        Sugars simple and complex contain carbon mmmmmkay

        http://www.fao.org/docrep/v5030e/v5030e06.htm

        “Vegetables contain generally 90-96% water while for fruit normal water content is between 80 and 90%.

        Carbohydrates are the main component of fruit and vegetables and represent more than 90% of their dry matter. From an energy point of view carbohydrates represent the most valuable of the food components; daily adult intake should contain about 500 g carbohydrates.”

        mmmmmkay

        • lprent 17.1.1.1

          …daily adult intake should contain about 500 g carbohydrates

          My daily intake is currently less than 20g on a high protein diet. I haven’t noticed much difference to my energy levels. I have noticed the drop in weight from 109kg to 93kg over the last 9 months. I’ve also noticed that my food bill increased quite a lot.

          I don’t think that I’ve ever been close to 500g carbs per day except when I was in the army or working on farms and I was burning energy as fast as I could eat. As a largely sedentary programmer I never went much above 300g and at that level I kept putting on weight.

    • lprent 17.2

      Read the post. Who was it written by?

      The Standard is the notices and features ‘author’. We use it to put up work that is not from one of our authors. I realize that this tends to confuse dribbling morons such as yourself – but that I’d say that is hardly surprising. I doubt that you have the wit to aim when peeing in the toilet based on your previous comments.

      I reposted these posts from no right turn because they cover the ‘for’ case better than anything else. However personally I am unsure if it is a good idea. The costs of complicating accounting systems with the rorting that loopholes creates is pretty damn high. I question if the benefits outweigh those

      • Lanthanide 17.2.1

        “The costs of complicating accounting systems with the rorting that loopholes creates is pretty damn high.”

        Funny, I said the same above, and felix didn’t agree:
        “It will cost fuck all in compliance”

        captcha: peculiar

        • lprent 17.2.1.1

          Well, I’m not felix. Opinions will differ based on previous experience.

          In my case I’m heavily influenced by installing accounting software in the late 80’s when GST got installed. It isn’t the software that is the issue really (although that will be a bit of a pain). It is getting the smaller organizations geared up for the changes in how they handle categories that is the really expensive part.

          Bearing in mind the way that the IRD has been cut back over the last few decades, I’d also worry about being able to monitor for rorting with inventive definitions. But at least Labour have gone for a very simple definition of what fruit and veges are in terms of GST rate.

          I still haven’t had time to look at the research to see the benefits – but I’ll get to it eventually.

  18. Joe Bloggs 18

    As usual the left wing nut jobs conveniently ignore the fact that fruit and vegetable prices have actually fallen by 11% since National took office, having jumped 54% under Labour.

    • Lanthanide 18.1

      And you conveniently ignore the fact that politics has little to do with global supply and demand for food (at least, as it affects NZ).

    • lprent 18.2

      Reflecting a temporary change in demand both locally and overseas. It is called being in a recession you numbskull. When the recession ends then the prices will almost certainly resume their upwards path in response to demand.

      Next I suppose you’ll be claiming that the fall in house prices as a result of the recession can be pinned on National as well?

      • Joe Bloggs 18.2.1

        putting your abusive personality to one side for a moment, where’s your evidence that there’s been a decline in demand so significant as to completely change the price trend from a 54% growth rate in 9 years to a decline of 11% in the two years immediately following?

        Have a look at the NZ organic report for 2010:

        http://www.organic-market.info/web/Continents/Australia-Japan-Pacific/New_Zealand/201/204/0/7914.html

        There’s a segment that’s growing in demand despite global recessionary pressures that would otherwise encourage consumers to buy lower priced conventionally grown produce. No sign of a change in demand forcing prices down by over 10%.

        • lprent 18.2.1.1

          Where is your evidence that the government policies (by any government) have had any effect on fruit and vege prices over the last 20 years? As far as I’m aware there are no government policies that have any significant effect apart from overall inflation rates.

          Shouldn’t you establish that there is an effect first? What I’m saying is that there isn’t one – which in economics should always be the null hypothesis.

          If your asserted theory is correct then you should be able to point to a change in government policy with a subsequent effect on the prices above the inflation rate.

          Take your time – you will probably need it.

          At least Labour put this policy change up with some evidence that says a change in tax policy should cause an effect. But of course that hasn’t really happened in the last 20 years – the nearest effect would be the changes in company tax rates and that was pretty minor.

          And BTW: you really are a bit of an idiot who asserts things that you can’t prove. I always tend to honesty rather than politeness. If you don’t want to get the opinion then avoid doing things that make me form it.

  19. OleOlebiscuitBarrell 19

    Here is a contrary view but you might not like the source:

    7 reasons why cutting GST on food will not help

    • lprent 19.1

      This is a place for discussion – often of differing viewpoints even amongst the authors. I think that I’ve made it clear that my opinion tends more towards Sparkies view than I/S’s current opinion.

      I/S at NRT also started from that viewpoint as he links to in his posts. I have enough respect for both I/S and the NZLP to re-look at the question before forming my own opinion.

    • jbanks 19.2

      Hilarious! Nothing like some classic self-ownage by the dazed & confused.

  20. Frederick 20

    That is classic from OleOlebiscuitBarrell. Talk about a massive own goal.
    I think they should have inserted the comment earlier in the thread before it lost momentum and had some of the salient points in full rather than in a link. But still great stuff.

  21. Lats 21

    I’m probably more libertarian at heart than liberal, but have still always voted Labour and/or Greens because social and civil liberties are more important to me than economic liberties. However I have to say I don’t entirely support the call to drop GST from fresh fruit and veg. I applaud the cited reason why Labour has adopted the policy, there is certainly nothing wrong with wanting to increase the health of NZers. I’m just not convinced that fiddling around with GST is the best way to achieve this. GST currently is a very simple and straightforward, mostly all-inclusive tax (from memory I think a few transactions of a financial nature are the only ones not subject to GST, but am happy to be proven wrong.) Like it or not, introducing any complexity will invariably lead to slightly higher administrative costs, both for govt and for retailers. This will probably be minor compared to the loss of revenue for govt, and I’m not convinced this will be offset by the savings in health costs.
    I’m also not convinced that dropping the cost of fresh produce will even lead to the effects desired. Maybe prices in the supermarket are lower here in Chch than up north, but for me it is already cheaper to buy fresh produce and prepare meals at home than to live off takeaways. So if lots of people choose to eat takeaways, or buy unhealthy options at the supermarket, I suspect the reasons have little to do with cost. Again, I’m open-minded about this, and am prepared to be proven wrong.
    The more concerning aspect of this policy for me is the precedent it is likely to set. Upon seeing the benefits to fruit and veg retailers, how long will it be before Fonterra lobbies to drop GST on milk and other dairy products? Or for bread manufacturers to lobby for exemption for their line of products? How about red wine and dark chocolate? Taken in moderation they have proven health benefits. Shouldn’t they then be given GST exemptions? On the face of it exempting GST for “healthy” foods doesn’t sound too bad, but it is determining the cutoffs that becomes ever more complicated:
    I refer you to a specific case in Australia recently where a court case was held to determine if a particular imported product (mini ciabata “bread”) was in fact bread or was a cracker. You see, bread in Aussie is exempt from their GST because it is a staple food substance. Crackers however are seen as a luxury item, and are therefore not GST exempt. The importer even flew in an italian bread expert (Giampiero Muntoni) to testify that the product was in fact bread. Signor Muntoni holds an EU certificate that entitles him to certify whether a product is a bread or a non-bread item for value added tax purposes in Italy. In short, he is a bread-decider. For more, see here: http://www.cis.org.au/publications/ideasthecentre/article/1631
    Is this the sort of nonsense we really want going on here?

  22. Jeong Chun phuoc 22

    “Time for Green Fiscal Policy : The case of New Zealand”

    As at Oct 2010, New Zealand has increased it’s GST Tax from the previous 12.5% to the current 15% GST rate.

    This increase is a double whammy for all citizens taking into view the current national economy performance vis-à-vis global economic sentiment.

    Fiscal policy changes in New Zealand at this point in time does not in fact required an increase in the effective GST rate.

    New Zealand must alter her current economic performance to maintain the outdated social fabric that has stood the test of time for the past decades.

    Fiscal policy changes must take into view domestic economic performance with a view to chart a more effective economic performance in the global arena of economic achievement and sustainability. The green economy of New Zealand must be further explored, rejuvenated and revamped for international export and adoption within the Green Revolution paradigm framework.

    ………………………..
    Jeong Chun phuoc
    Lecturer-in-Law
    and an advocate in Strategic Environment and Taxation Intelligence(SETI)
    He can be contacted at Jeongphu@yahoo.com

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    3 weeks ago

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