There is a well-meant move afoot to try to remove GST from food prices. It is dangerously misguided.

When GST was first introduced, some politicians half-promised that it would replace income tax. Incredibly, some voters believed it. Today, we have the worst of both worlds – high marginal income tax that shifts an unreasonable amount of disposable income from averagely paid people to the wasteful Michael Cullen and his colleagues, and double taxation that puts GST on rates, and adds it to fuel that is already subject to excise duty.

In some countries, double taxation is unlawful. The reason for this becomes clear when inflation kicks in, as it is now doing with our petrol and food prices. When Cullen collects ever more as the base price of fuel rockets – through increased excise duty, worsened by another tax on top – what we see is an evil spiral. And when Dr Bollard maintains high interest rates based on an inflationary trend that is largely beyond our national control, he only makes matters worse.

So, understandably, cash-strapped people who find themselves paying through the nose for basic foodstuffs such as milk, butter, cheese and bread, demand an end to GST on them.

In terms of saving people from poverty, they’re looking in the wrong place.

GST, when applied across the board, is an elegant user-pays tax. After all, no matter how wealthy you are, there is only so much bread, cheese, burgers and butter you can eat in a week, and if you are really greedy, you pay the price.

But the minute you start tinkering with a plain and simple system of sales tax, you rapidly get into trouble – as they did in the European Community. In France (a nation where, since Napoleon, Parisian civil servants have delighted in making laws that are ignored by most other French people), there are three levels of VAT (what they call our GST). In the UK, cowardly politicians got rid of VAT on “food” and footwear, among other so-called necessities of life.

The result was a VAT system that baffles everyone, and employs literally millions of civil servants (all paid for by taxpayers) who struggle in the most complicated labyrinth of ever-changing tax legislation. There are many private companies who make large profits trying to recover value-added tax for their clients. The processes are mind-boggling, and sometimes take years to resolve. Nobody understands a tax system which, thanks to thousands of faceless meddlers scribbling away in Brussels, Maastricht and elsewhere, adds around 10,000 amendments a year to VAT law.

Removing GST on food would open up a dreadful can of worms. What is the definition of food? Chocolate? It is food, if you are stranded on a mountain with nothing else. Claim a GST refund. Beer? Some people think that real beer, made from barley malt, hops and water, is nutritional. Anything baked or cooked or re-processed? Should salt be zero-rated? Or barley? Or sugar when incorporated in bread, or beer, or biscuits? Your call…

What you can be sure of is that the minute GST is removed from “food”, an army of new civil servants will be recruited to determine the meaning of “food”. They will reach a well-paid retirement, but no conclusion.

The temptation to go down this route must be resisted. Instead, Cullen should remove excise duty on fuel and bring his amazing intellect to bear on reducing the basic rate of income tax to 10c, the top rate to 30c and inflation-proofing income tax across the board. He should seriously think about abolishing excise duty on petrol and diesel, and removing double-dip taxation in other areas.

It is no good increasing welfare payments, because that merely encourages lazy people to do nothing to improve their lives.

The only way to make this country work is to put more money back into the pockets of those who earn it, remove the jobs of bloated civil servants who don’t, and take the idea of higher productivity very seriously. The way to start doing this is by reducing taxes on earned income, and probably raising it on consumption.