At the announcement today in Lower Hutt, leader Chris Hipkins also said Working for Families payments would increase.
‘Today I’m announcing that if re-elected Labour will remove GST from fresh and frozen fruit and veges from the 1st of April next year,’ said Hipkins to an audience of party faithful.
‘Cutting GST from fruit and vegetables will ease the pressure on families at the checkout while we get through this current inflationary cycle, but it will also mean families can make healthier choices when at the supermarket.
‘Other countries like Australia take GST off fresh fruit and vegetables and there is no reason why we cannot do that here. In fact in most countries that have GST or a value-added tax, they have a variety of different carve-outs for certain items. If anything New Zealand is an international outlier in that we apply GST to almost everything.
‘Some of the tax purists will say we should not do this. They will always be able to find a reason not to do something. But they are not the ones struggling to pay their grocery bills when they reach the checkout at the supermarket. They’re not the ones having to remove things from their trolleys. This policy is aimed at New Zealanders for whom every dollar at the checkout matters, because I am in it for them.
‘But, it doesn’t all end there. Today I’m also announcing that if re-elected, on the 1st of April next year, we will make the largest ever increase to the Working for Families ‘In Work Tax Credit’. It’s an increase that’ll see 160,000 families $25 a week better off under Labour. And before the end of next term, we’ll also be lifting the Working for Families abatement threshold to $50,000, meaning 175,000 families will gain on average $47 extra a week.
‘The combined effect of the two announcements that I have made today mean that many low and middle income families will be up to $50 a week better off once these changes have been made.’
Political commentator Bryce Edwards said the ‘election bribe’ was a ‘subsidy for supermarkets’ and ‘nicely illustrates the politics of a Labour Govt that is highly aware of the huge inequalities & dysfunction in the tax system and responds with something flawed & tiny, but just what Foodstuff-Woolworths lobbyists would love.’
Today's GST "subsidy for supermarkets" election bribe nicely illustrates the politics of a Labour Govt that is highly aware of the huge inequalities & dysfunction in the tax system and responds with something flawed & tiny, but just what Foodstuff-Woolworths lobbyists would love: pic.twitter.com/ZQlaGwqVVK
— Bryce Edwards (@bryce_edwards) August 13, 2023
ACT Party leader David Seymour called the announcements ‘vote buying gimmicks.’
‘It’s an act of desperation from a visionless, poll-driven party which is out of ideas, out of Ministers, and fast running out of other people’s money. They know the policy doesn’t work, and we know they know because their own Finance spokesperson said so just a few months ago!
‘Labour has known this policy won’t work since the last time they tried to introduce it in 2011. Their own Tax Working Group told them, saying “GST provides a poorly targeted means of addressing distributional concerns, as exemptions provide a greater benefit for higher income households than lower income households on an absolute dollar basis. Exemptions also creates complex boundaries, increase compliance costs, and can be a slippery slope.’