A Labour-led Government would scrap GST from fresh fruit and vegetables to encourage healthy eating and help New Zealanders as higher GST on other goods is imposed.
Opposition leader Phil Goff is expected to make the announcement today, the first in a three-week campaign about the rising cost of living that will see Labour MPs pushing the message in their electorates.
I’m interested to see what they do with this in a strategic sense. Labour has signalled this policy for around six months and they’ve spent last week announcing that they’re going to announce it today.
Setting aside the debate around whether it’s good policy it’s not exactly visionary: it will have a trivial impact on most people if introduced. So are Labour being clever and about to launch a much more ambitious policy (‘under promising and over delivering’, as Clark always put it) or will they just announce the rather anodyne policy they’ve said they’re going to announce?
(Goff’s last big policy announcement was back in January when he gave his ‘many not the few’ speech. A major policy development was signalled but his grand idea was to cap the salaries of the public service senior managers. It transpired that only a dozen or so people would be impacted. I don’t think we heard anything about this policy ever again)
If it is just the GST exemption for fruit and veges I predict lots of pious wailing about the simplicity and integrity of the tax system (exemptions are only good when they benefit companies and high net-worth individuals, not ordinary people) and lots of ontological idiocy about whether fried chicken is a fresh fruit or vegetable: ‘Won’t we need thousands of lawyers to figure that out?’
The real flaw with the policy is that its just a gimmick. I’ve written before about how the price difference between fruit and veges at the supermarket and the farmers market down the road is several hundred percent: we now know that the supermarket duopolies sell alcohol at a massive discount and pre-load the losses onto their fresh produce. So a policy that decreases the gross cost by 15% is going to be negligible – it could be wiped out by a single promotional campaign for Montana wines.
It’s hard to think of a more socially irresponsible sales technique than alcohol loss-leading but a policy to address that wouldn’t dove-tail in with Labour’s schizophrenic ‘axe the tax’ campaign so instead of a policy to decrease produce prices by ~100% at a cost to the supermarkets and liquor companies we get a policy to decrease them by 15% at a cost to the taxpayer.
Update: Labour has announced that they’ve announced the policy they said they were going to announce.