Labour's fruit, veg GST plan slammed

Photo / Hawkes Bay Today

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Revenue Minister Peter Dunne says Labour's policy of removing GST from fresh fruit and vegetables is political masquerading by a party suffering in the polls.

Labour today announced it's election policy of zero GST on fruit and vegetables.

Sabotaging the tax system was no way to address obesity, Mr Dunne said.

He said Labour had staunchly defended the integrity of the GST system in the past.

"This is cynical politics masquerading as concern for public health, otherwise why has it taken them so long to come to this position.

"It is principle-free panic on the road to electoral defeat."

It was also arbitrary to remove GST from fruit and vegetables but not meat, poultry, fish and eggs, Mr Dunne said.

Maxim Institute researcher Steve Thomas said a single GST rate on all goods gave the clean system needed and introducing exemptions would create mess and complexities.

"(That) inevitable bumps up the amount of money wasted on administering the system", he said.

"Exempting fruit and vegetables from the GST system is also fairly arbitrary... why not exempt running shoes? Why not exempt doctors visits?"

Green Party co-leader Russel Norman said his party was likely to support any legislation to remove GST from fruit and vegetables up to the select committee stage, if it came to that.

"There are potentially benefits from that policy but we need to see whether it will be passed through - we have a supermarket duopoly which means there's no guarantee that any of those price cuts would be passed through."

- NZPA