Will removing GST on fresh fruit and vegetables achieve its stated aim?
CPAG considers it would be much less costly overall and more beneficial to address the lack of purchasing power of low income families than to attempt to make good food more affordable by a selective application of GST.
In addition to the high administration costs such a policy imposes on both the IRD and the retailer, taking GST off fresh fruit and vegetables is likely to benefit high-income families the most and the revenue cost of such a policy requires extra taxes elsewhere or spending cuts that may harm low-income households more.
Early in 2010 the Maori Party's Rahui Katene put forward a private members bill which would exempt healthy food from GST, and on the 27th September Labour announced that it will remove GST from food if it wins the next election.
Read the full backgrounder here: "Will removing GST on fresh fruit and vegetables achieve its stated aim?"