“If Labour announces a policy to remove GST from fruit and vegetables, that’s not a sign they want to address the cost of living. It’s a sign of a truly desperate political party, willing to throw any semblance of sensible policymaking out the window to snare some votes. Kiwis deserve better,” says ACT Leader David Seymour.
“The people who benefit from this policy are those who can already afford punnets of fresh blueberries and raspberries, the families who are looking at the price of a cut pumpkin will barely notice any difference.
“Labour knows this policy won’t work, their own Tax Working Group told them. It said "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.”
“The simple, universal nature of GST is what makes it such an effective revenue collector, where would you stop with the exemptions? What about tinned fruit? Milk? Bottled water? The biggest winner would be the avalanche of lawyers and lobbyists seeking to create and exploit new GST loopholes.
“Australia and New Zealand have similar GST systems with a key difference - Australia has exemptions, and New Zealand simply applies it across the board. What's the result? Australians spend twice as long and twice as much money every year complying with GST than New Zealanders. This is the one thing we're doing better than Aussies at and Labour is trying to throw it away.
“Labour’s likely coalition partner Te Pāti Māori announced a tax policy today with a $30 billion hole. Combine that with the Green Party’s wealth tax, and together they would destroy the country’s economy and drive anyone with a sense of ambition away.
“ACT has a fully costed tax cut package that is built on aspiration for New Zealand. We would cut wasteful spending by $38 billion without touching frontline services and cut taxes sensibly. This allows us to implement a two-rate tax system – 17.5 and 28 per cent. If you’re a nurse on $70,000, our tax cuts let you keep $2,500 more a year.
“We all know Labour is deeply cynical around policymaking, this is the same party who suddenly pretended to care about crime months before an election after ignoring the problem for years. Announcing policies as economically illiterate as this for a few votes would be a new low even for them.”