Finance Minister Grant Robertson says “everyone else in the world” has tax exemptions such as for fresh fruit and vegetables, and so can New Zealand.
The Finance Minister gave a speech at the Financial Services Council’s annual conference on Wednesday, which is this year being held in Auckland with a theme of building consumer confidence.
Robertson said the global outlook was challenging. New Zealanders were having a tough time with the cost of living and Chinese consumers’ falling confidence was clearly impacting the country, with falling demand hitting dairy prices.
He said the Government’s proposal to exclude the 15% Goods and Services Tax (GST) from fresh and frozen fruit and vegetables was part of a package of measures aimed at helping people struggling with rising interest rates and inflation.
Robertson was famously against the idea of such a tax exclusion in the past, and tax experts have said tinkering with GST will add complexity and cost to the tax system without targeting people who need the most help.
The Finance Minister told the FSC conference audience that because the GST exemption was part of a suite of changes aimed at the cost of living it made sense.
The Labour Party also announced an increase of the In-Work Tax Credit by $25 a week to $97.50 ,which it said would benefit about 160,000 families and said it would lift the Working for Families abatement threshold to $50,000 in 2026.
Roberton said he “came at this as a cynic of this policy”.
“... But actually the more work I've done on it, and the more I have looked at it, I think NZ is not that different from anywhere else in the world where there are zero ratings or exceptions for certain things from VAT or GST system, so we can make it work. I acknowledge it's new, and therefore we will get lots of questions about it, but if everyone else in the world can do it, so can we and it can help with the cost of living, to some extent.”
Robertson said despite the difficulties in the global outlook, the New Zealand economy was 6% larger than before Covid-19, the Government had relatively low levels of debt and unemployment was low at 3.6%.
He said he would call the New Zealand economy “resilient but impacted”. Robertson said the migration turnaround was positive, and while the corporate tax take was down, people were in work meaning PAYE was up, and he said Government spending was tracking lower than forecast.
From here, the New Zealand economy needed to make that transition to one with high wages and low emissions.
Robertson said the biggest challenge facing the next Government would be climate change adaptation and mitigation, and said some current financial sector products and services were not fit for purpose, and the industry needed to work together with the Government to change them.
53 Comments
Unfortunately for Grant history will recognise him as the worst finance minister since Muldoon. He inherited a country whose finances were in good shape through the hard work of Cullen and English, only to throw it all away. Yes Covid happened but the terrible waste and non sensical policies such as the fruit and vegetables GST exemption reflect his poor understand of basic economics. His BA degree and career as a bureaucrat were not the qualifications we needed in a finance minister during these turbulent times.
His BA degree and career as a bureaucrat were not the qualifications we needed in a finance minister during these turbulent times.
As a student at Otago, one of Robbo's big moments was shouting down Roger Douglas on campus. With his mates, apparently caused so much disruption during Douglas' speech that the other students couldn't hear. Quite rude if you ask me. Not to Douglas, but to those who wanted to listen. Self-important jerk.
Later they attacked Douglas' car as he was leaving. One of the students - another self-important git and Wgtn barrister Felix Geiringer - was run down.
You woild help the poor more by putting a 1500% tax on coke, KFC, Macas, vape, V8 Holdens, noisey Harley Davidsons, tatoo's, Booze, 300 inch plasma TVs, white Nike trainers, NYC caps, gold chains, USA beanded clothes ..
And all that other expensuve junk they own !
No wonder they are living in cars.
I don't particularly like Nicola Willis, but reference his rudeness to her over the last day or so
Willie Jackson losing the plot we all expect ... the clue is in his first name as to what he is - but Robbo strikes me as being more of an under-the-radar jerk.
My feelings too. His performances in parliament when he tries to be all witty, loud, and literate are simply annoying. Perennial student politician.
Get real. Muldoon buiit all the infrastructure that gives you the livestyle you curently enjoy and he did it while intoxicated and never did he speak around a topic using spin or wokeness.
Robertson just borrows to pay for minority "dream catchers" and Green washed dirty laundry lies while " Rome burns.
The cupboard is bare and there are no gold " lòok at what i achieved mom"" stars on his fridge
well to be fair, he seemed opposed the no-GST for fruit and veggie idea, Hipkins wanted it because Labour needs 'announcement'.
as Roberson's performance, I think you are right. Labour's ability to manage the books and managing NZ economy is appalling. the worst of all was the monetary policy, lower the interest rate too low for too long, made the interest rate jumped up and down too much.
and after 6 years, polls show people feel almost all public services are worse, hospitals are worse, schools are worse, public transport is worse, housing, well, most people living in public housing.
All food bought from a supermarket/shop should be GST exempt, then. Why is meat, dairy, soy etc not gst exempt?
Fruit is objectively not healthy so you can't use meat or dairy as an argument, either.
Oh that's right- the govt might stand to lose more money than otherwise if we did that. Perhaps Robertson should make baking goods gst exempt at least because he could justify his half baked policy then.
Apple slices from maccas to be gst exempt but not fries. McDonald’s garden salad may need to be less mixed to be gst exempt. Blend it yourself smoothie shops to outcompete those who blend it for you as the blend it your self stores can sell you the ingredients gst free!
Can somebody explain to me why frozen vegetables aren't classed as processed (apart from Chippy needing to chuck a few scraps to the poorer end of town who have no choice but to buy frozen?)
After all, the vegetables being frozen means they have been processed, right?
If my knowledge serves me right (having worked with a business that produces the machinery to do this) the loose carrots you buy at the supermarket are processed too, as they are washed/peeled via a high-pressure washing system, unless you buy the bunched carrots that are only available in-season.
It was a bit repetitive when that journalist kept pulling various fruits and vegetables from his pocket at the press conference the other day (with Chippy unable to provide an answer, as would be expected) but he also raised a valid point.
Also, imagine some of the rorting that will go on with smaller players. For example the juice bar that suddenly decides it is selling you whole fresh fruit and vegetables that just happens to come with a post-purchase complimentary juicing and cup with straw ... fun times ahead.
Nowhere else in the world has as efficient a GST system as does New Zealand. Perhaps that is why Labour - including Grant Robertson and David Parker were opposed to GST exemptions until Labour decided they needed _several_ electoral bribes at this election due to the extreme unpopularity of their racist Co-Governance (including their 3 Waters and Resource Mgt act) and their toxic "gender" ideology scams.
None of this government has an actual policy position based on a coherent principle. Transport, basic minimum wage (you can't tax minimum wage earners at 30 cents in the dollar on any part of their wage and claim to be a worker's party, but GR wants to) and now GST.
It's all just horrendous knee-jerk policy reactions to bad polling trying to find a silver bullet with an election that is fed up with their bullshit. I see they're going to try announcing the North West busway they promised would be Light Rail in 2017 and have left basically to stagnate ever since - but now it's getting the reannouncement treatment because National pitched a policy at it.
There is no overriding mission driving a strategy other than 'say what it takes to get elected again, regardless if it makes sense or is in the country's best interest'.
I'm intrigued with this policy.
The headline that fresh fruit and vegetables will be gst exempt is catchy from a consumer perspective.
Does that exemption traverses the total value chain?
For example, an orchardist growing apples - will they claim gst refund on production inputs? Or does gst continue as usual until the end retailer, who claims gst on the wholesale buy value then does not add gst to the difference between that buy price when setting the end sale price?
I'm sure they will. If not, then an item that costs $100 to the retailer will have $15 GST loaded against it.
Assume it's a GST exempt item. Cost $100. Sell $120. $15 of GST in the supply chain portion not claimed = 12.5% effective GST rate.
It would be an absolute minefield otherwise, particularly if you're handling exempt and non-exempt products. How much GST do you claim for diesel in the forklift?
Having previously lived in the UK and South Africa I was very surprised to find that fruit and veg are not GST-exempt in NZ. No wonder these people have such a high incidence of bowel cancer, is what I thought to myself. And I find it mind-boggling that a country like South Africa has both GST-exempt and zero-rated items, yet NZ-ers can't figure out how to implement such a policy?
Heck, the biggest insurance company in SA rewards its clients (on its life and medical insurance products) by giving them discounts when they buy fruit and veg from their equivalent of 'Countdown'. You simply ring your stuff up at the till and pay less. Your receipt marks the food that you received for less and shows you how much you saved. Simple! People in Africa can figure out how to do this, guys!
Writen by Bob Jones today...
NATIONAL – 39%
LABOUR – 20%
ACT – 20%
GREENS – 11%
MAORI PARTY – 5%
NZ FIRST – 5%
Above are my poll predictions, net of the nutter under 5% riff-raff (Tamaki, Opportunity Party et al).
Including NZ First as anti-government, those numbers amount to 2 in every 3 voters being anti-government.
Much of Labour’s lost vote will go to the Greens and the Maori Party, while many others will simply not vote.
Post-election I expect Hipkins will remain Labour leader but anticipate some older Cabinet minister survivors to announce their resignations next year. That’s because after enjoying cabinet office with all of its trappings for 3 or so years, the prospect of joining a rump Opposition is understandably disheartening. Some will pursue local government elected office.
That’s a good thing for Labour in introducing fresh blood; enthusiastic rather than burnt out.
The principal thing voters crave is stability and certainty, thus as our post-war political history shows, government has been dominated by National who simply “mind the shop”.
But after 3 or even 4 terms voters develop a time-for-a-change mentality and elect Labour who in their first term usually introduce overdue reforms. The danger lies giving them a third term in which madness, naivete and mis-placed idealism come to fore.
Helen Clark was an exception in running a National type, don’t rock the boat government and thus gained 3 terms. Under Michael Cullen we enjoyed quality economic management, arguably the best in the post-war years.
Their moments of madness were relatively trivial, my favourite being Judith Tizzard’s announcement of an “unemployed artists benefit”.
Three days after that announcement I ran across her at a cocktail function. “For God sake Judith,” I said, “there’s no such thing as an unemployed artist, just unsuccessful ones”.
“It’s not a concern Bob,” she said, “Our people (Internal Affairs) tell me they’re only expecting less than 20 applicants”.
From memory within 2 months the scheme was dropped after several thousand applications were received from the East Coast, a plainly organised affair. They were artists all right; bullshit artists.
The current government will go down in history as the worst of the post-war seven decades and Jacindamania as the most shameful and embarrassing phenomenon our history
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