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Labour's promise of GST off fruit and veg - what would be covered, what would not (www.rnz.co.nz)

submitted 1 year ago by [email protected] to c/[email protected]

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I think this is an excellent policy, and a long time coming. This is done overseas with good effect. While I don't think it's a magic bullet, it is definitely a step in the right direction.

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[–] [email protected] 6 points 1 year ago* (last edited 1 year ago) (3 children)

I'm not convinced. If implemented, you could never reverse it because you're just losing votes. That's a good reason why it's a thing overseas - they used it to buy votes and you can't remove it without losing votes. I also think our duopoly of supermarkets is one thing that separates us from most other western countries that have GST exemptions like this.

What I've seen the past few years is complaints about how when things like this happen, companies just absorb most of the savings as profit. With a duopoly of supermarkets, I can't see why after a few months fruit and veggies won't be back at normal prices, with the saving taken by the supermarket as profit.

Any thoughts on this angle?

[–] [email protected] 3 points 1 year ago (1 children)

With a duopoly of supermarkets, I can't see why after a few months fruit and veggies won't be back at normal prices, with the saving taken by the supermarket as profit.

Fresh fruit and veges is one area where there is real competition in the marketplace. Plenty of independent vege shops around (in the centres of population at least).

I can't remember the last time I bought veges from a duopoly supermarket. Fresh and Save, Fruit World, Tai Ping, etc are all good options.

[–] [email protected] 3 points 1 year ago (1 children)

I also don't normally but fruit and veggies from supermarkets. But the vast majority of people do, and that's what makes the duopoly.

And remember that every dollar exempted from GST is a dollar of tax that needs to be raised another way (or a dollar of government service that needs to be cut).

I guess I don't understand the intent. Are they trying to provide cost relief? Wouldn't removing tax on income under X amount be easier to administer?

Are they trying to encourage healthier choices? Maybe a sugar tax could help (a supermarket is unlikely to absorb a tax, but they will absorb a profit).

Although if this is a way to justify creating a commission to monitor supermarket profits (which they said they will do), then I could get behind that.

[–] [email protected] 2 points 1 year ago (1 children)

I think we, as "lay-persons", tend to only approach such issues from a single standpoint. I know I do, but I try to keep in mind that we do not see everything that goes into these decisions.

If I had to guess, I suspect these are the reasons behind this policy:

Wanting to provide some cost relief, targeting food costs, but being unable to afford/unwilling politically to remove GST from all food.
Wanting to encourage improved diets, which will save money in the long run on healthcare.
Unwilling politically to ever raise tax, so adding a tax on sugary drinks is a non-starter.
Having to pick a policy which isn't just a handout, as it can give a win to the right.
Having internal polls/data that this policy is popular amongst voters.
Adjusting tax brackets could be spun by opposition as "raising taxes".

I think Labour should be braver, but I understand they feel they are losing their chances of winning the election and thus are playing it safe.

[–] [email protected] 1 points 1 year ago (1 children)

You make a lot of good points.

I think Labour should be braver, but I understand they feel they are losing their chances of winning the election and thus are playing it safe.

This is likely a big part. If they were clearly losing we would probably see more impactful policies. Since they have had two terms and know that's about when parties get voted out, yet they are still neck and neck with a right wing coalition, their best chance of winning is likely to make small adjustments that should be universally popular to gain a small amount in the polls, rather than going all out and risking a big drop in popularity.

[–] [email protected] 3 points 1 year ago

I agree completely with your assessment.

My biggest complaint with NZ Politics is it seems people vote in the opposition just cause, rather than because they have good policies.

[–] [email protected] 1 points 1 year ago

I've just posted a story from RNZ, where every expert they came across though it was a stupid idea.

Yeah, it's a dumb idea for sure.