It is hoping that this will trick us all into eating a little healthier, ultimately resulting in savings for our health system.
There is little doubt that there is a problem. True to our pioneering heritage, New Zealand is at the cutting edge of the obesity epidemic, with the latest figures putting us just behind the United States and Mexico in the fat stakes.
More recent work by Bill Gates shows that obesity's evil twin, diabetes, lurks not far behind - we are in the top five developed nations for that too.
But is this the right response to the problem?
First, let's look at the focus on fruit and vegetables. The consensus is that we eat too much food energy (that is calories, particularly fats and sugars), and not enough micronutrients (like vitamins and minerals).
Fruit and vegetables are generally high in fibre, which fills us up but doesn't give us too much energy.
Sure, some fruits are high in sugar but the positive impact of the fibre generally outweighs that - as long as we don't just drink the juice.
And veges, in particular, are the best possible source of most vitamins and minerals. This is solidly backed up by the science, regardless of all the contradictory studies you read about in the media.
So we need to eat more fruit and vegetables, that much we know.
Is taking GST off them the right approach?
Changing relative prices does seem to help. We humans are programmed to seek out energy-dense foods.
Food processing has allowed for cheap, safe, convenient food, but this has come at the expense of increased energy density and dwindling micronutrients.
Over the past few decades these energy-dense foods have become cheaper relative to nutritious foods. As a result, price-conscious consumers tend to eat this sort of food.
But it is a false economy, because our health system ends up picking up the bill.
How much difference would removing GST on fruit and vegetables make? On average it would save each household just over $2.50 a week.
A trial of this concept led to households spending all the savings on more fruit and veges, which is encouraging - at least they didn't spend it on booze and fags.
Assuming a household spent all that extra money on fruit and vegetables, it might be enough for an extra bag of apples. Given that fewer than half of New Zealanders get their 5+ a day, it seems unlikely that this policy alone will be the silver bullet.
Nevertheless, it comes with a price tag of $250 million.
But this is only half the problem. When we look at the spending by different household groups, a different picture emerges.
The poorest 10 per cent of New Zealand families spend about $10 a week on fruit and vegetables. At the other end of the spectrum, the richest 10 per cent spend around $30 a week.
This means taking GST off fruit and vegetables will give the poorest just over $1 extra a week. That will barely make a dent in their food bill. Meanwhile, the richest will get just under $4.
That is before we even start to deal with the tricky boundary issues. Labour's plan to take GST off fresh fruit and vegetables opens a Pandora's box in that regard.
Currently we have a very simple system of GST collection, which makes our collection rate one of the highest in the world. While removing GST from fruit and veges is a fairly minor change, it would introduce border issues into the system.
For instance, how will it deal with frozen, cooked or processed fruit and veges? Will growers be able to claim expenses for growing fruit and vegetables that are to be used for cooking or processing purposes? What if a salad on sale includes some cooked elements and some not?
While this policy might be a step in the right direction, it is not really going to help the people who need it the most.