The Labour Party in New Zealand has officially announced its election promise to remove the Goods and Services Tax (GST) from fresh and frozen fruit and vegetables.
This policy is part of Labour’s “10 point” plan aimed at easing the cost of living for New Zealanders. The party leader, Chris Hipkins, also revealed plans to increase Working for Families payments for approximately 160,000 families.
The removal of GST from fruit and vegetables is estimated to save households around $4.25 a week, based on an average spend of $32.50. This move is intended to address the issue of rising food prices, with Hipkins emphasizing that the removal of GST would make healthier food options more accessible and affordable for low-income families.
Despite criticism from economists and tax experts Hipkins pointed out that several other countries, including Australia, have similar exemptions from GST for certain items, and New Zealand would be aligning with global practices.
To ensure that the savings from the GST removal are passed on to consumers, Labour plans to establish a new Grocery Commissioner who will monitor supermarkets’ pricing behavior and take action if needed.