Labour's fruit and veg GST proposal hugely disappointing, says NZ economist

August 28, 2023

Labour's fruit and veg GST proposal hugely disappointing, says NZ economist

If returned to power, Labour will scrap the GST cost on fruit and vegetables. Photo: muammerokumus CC-BY SA.

A New Zealand economist and child-welfare advocate has called  Labour's proposal to take GST off fruit and vegetables hugely disappointing, saying it would not be enough for the 160,000 children living in benefit-dependent homes.

Child Poverty Action Group spokesperson and economist Susan St John said it would mean about $4 a week. "When you’re talking about families that don’t have enough money for all the basics, it’s very unlikely to have any impact.”

Founder and chief executive of charity KidsCan Julie Chapman agreed. "I think that so much more could have been done with the $2 billion this will cost.

"In my view it should be used to put more money back into the pockets of low-income earners by way of tax breaks, so they have more than $5 a week extra, and they can choose what to spend that on. Because things are desperate out there.

"When you're living in deficit every week, which thousands and thousands of families are, it's so hard to get ahead.

"They need more money in their pockets to be able to pay for those other essentials that kids are missing out on. KIdsCan is providing them - but we would like to enable families to provide for themselves."

Despite warnings from economists and his own finance minister Prime Minister Chris Hipkins announced earlier this month that Labour would remove the goods and services tax (GST) on all fresh and frozen fruit and vegetables from April 1 next year.

A recent vox pop conducted by AUT asked people about the new policy if it would make any difference to their purchasing habits, and if governments should have done something about GST sooner.

Monty Sniperlo, 22, council worker

So, what do you think of GST being cut from fruits and vegetables?

That’s good, that’s good.

How much do you spend on fruits and vegetables at the moment?

About $50 or $60 a week for the whole family.

Would this policy make much of a difference to how much you spend each week?

Most likely, especially fruits.

Do you think that this should have been done sooner?

Yeah, long time should have been done much sooner.

Angela Mailans, 50, business owner

So what do you think of GST being cut from fruits and vegetables?

I think it sounds good.

How much do you spend on fruits and vegetables a week at the moment?

About $800

Would this policy make much of a difference to how much you spend each week?

It wouldn’t make any difference.

Do you think that this should have been done sooner?

Yeah.

Harvey Noal Brahme, 64, archivist

So what do you think of GST being cut from fruits and vegetables?

I think it’s a good for lower income families particularly for large families in South Auckland

How much do you spend on fruits and vegetables a week at the moment?

Between $5 and $10. I get more vegetables then I do fruit.

Would this policy make much of a difference to how much you spend each week?

No because I just buy what I need anyway.

Do you think that this should have been done sooner?

They probably shouldn’t have put it in place to begin with

Bau Maulia

Bau Maulia

So, what do you think of GST being cut from fruits and vegetables?

I suppose it’s good.

How much you spend on fruits and vegetables a week at the moment?

Maybe like 50 dollars a week, roughly.

Would this policy make much of a difference to how much you spend each week?

Properly, yeah if it’s cheaper yeah.

Do you think that this should have been done sooner?

Yeah.

Nav (family name not supplied), 29, audiologist 

So, what do you think of GST being cut from fruits and vegetables?

I don’t see how that would have any impact on anything to be honest.

How much you spend on fruits and vegetables at the moment?

Good question. I honestly don’t track it. I think if I were to estimate I would say 20 bucks a week, maybe something around that.

Would this policy make much of a difference to how much you spend each week?

I don’t think it would make a real difference really.

Do you think that this should have been done sooner?

I think the Government can focus on better things.

Left to right: Council workers Nick Harrison, Robert Delonge and Richard Ashlin.

Left to right: Nick Harrison, 53; Robert Delonge, 43 & Richard Ashlin , 44; council workers (answers mixed)

So what do you think of GST being cut from fruits and vegetables?

Great, cheaper vegetables is a good idea. Anything that lets poorer familes buy fresh fruits and vegetables is a good thing.

How much you spend on fruits and vegetables a week at the moment?

My wife does the shopping, but we shop seasonally with about

Would this policy make much of a difference to how much you spend each week?

On fresh fruit and vegetables, yes of course. It would give you more options rather then picking the cheapest stuff at the moment.

Do you think that this should have been done sooner?

Definitely for the people that need to eat healthier its unobtainable for them and that’s not fair. I was very shocked when I moved here [from England)] and I have a good job.

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