Bill Engligh writes:
The estimated $250 million cost of the new policy would have to be paid for by extra borrowing, pushing up already fast-rising public debt. …
The $250 million annual cost of the move, divided among all New Zealanders, is worth, on average, just over $1 a week – less for low income earners and more for high income earners.
“This puts the Government’s tax switch, which will leave the average income earner $15 a week better off, into perspective,” Mr English says.
But here is the real ripper:
“It’s also worth noting that fruit and vegetable prices have actually fallen by 11 per cent since National took office, having jumped 54 per cent under Labour.”
The removal of GST will have a relatively minor impact on overall fruit and vegetable prices and affordability, compared to normal price movements.
This is a point Danyl also makes at the Dim Post:
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.
I predict that if Labour ever got to implement their policy, it would have next to zero effect on the uptake of fruit and vegetables.
“Labour’s policy makes no sense and smacks of political desperation,” Mr English says. “Phil Goff must explain to New Zealanders why he is removing GST from imported, out-of-season raspberries and asparagus, but not from New Zealand frozen peas, which are a nutritious part of many Kiwi meals.
“People would be able to buy GST-free potatoes, take them home and make deep-fried chips. But at the same time, healthy foods like Weetbix, low-fat milk and wholegrain bread would be subject to GST.
Distinguishing between fresh and frozen vegetables is just the start of the stupidities that this policy would lead to.