National claims the Government is poised to announce a policy to remove the goods and services tax (GST) from fruit and vegetables.
Such a policy had previously criticised by Finance Minister Grant Robertson as recently as May this year, when he claimed it would be too difficult to administer and supermarkets would likely benefit more than consumers.
National’s finance spokeswoman Nicola Willis said today she understood that Robertson had been overruled by Prime Minister Chris Hipkins, with him set to announce the policy as part of Labour's tax plans.
But Hipkins today said he would not comment on any of the claims.
“We haven’t announced our tax policy yet, people can speculate all they like.”
So far, Hipkins’ only comments on tax have been to rule out a wealth tax or a capital gains tax ahead of the general election on October 14.
That rule-out has proved unpopular with not only potential support partners Te Pāti Māori and the Green Party, but within his own party. David Parker this week stepped down as Revenue Minister, saying it was “untenable” for him to continue in the role with him supporting a wealth tax.
The rule-out came as documents were released showing a tax-switch proposal had been worked on over the previous year but turned down at this year's Budget, which included a $10,000 tax-free threshold and other smaller changes paid for by a 1.5 per cent tax on net wealth over $5 million.
Robertson said the plan “had merit” but he was a team player and accepted Hipkins’ decision.
Willis had previously claimed the Government was working on such a tax proposal - but this had been rubbished at the time.
Now, Willis said Hipkins was due to announce a policy to remove the GST on fruit and vegetables. She says she understands Robertson opposed the policy, but was overruled.
“Despite the serious concerns having been raised, Chris Hipkins is no longer taking his finance minister seriously and intends to announce this policy."
National’s preferred policy was to reduce income tax, she said.
Green Party co-leader James Shaw said his party also believed it was better to focus on people’s incomes.
Deputy Prime Minister Carmel Sepuloni said she would not comment on Labour's tax policy until it was released, and new Revenue Minister Barbara Edmonds said she would not release it without the Prime Minister.
She said other countries had taken GST off food and whatever tax policy Labour unveiled she would make “workable”.
“Whatever the tax policy we’ve worked through, has to be equitable, has to be fair has to be workable.”
Te Pāti Māori wants tax off all kai
Te Pāti Māori today proposed what it said was the “most radical tax policy in a generation”, which included taking GST off kai, or all food.
The overall plan also includes a major shake-up of income tax rates - including zero tax on income up to $30,000, all funded through a wealth tax, which they say will return $23 billion, and ending tax evasion, netting $7 billion.
The policies form an overall bottom line for the party to “end poverty”, with elements of the policy - such as a wealth tax - likely to be integral parts of negotiations with any party that wants to work with them after the election.
They say it will help redistribute money from the country’s wealthiest few to over 98 per cent of New Zealanders, who will get a tax cut. Only those earning over $200,000 will pay more tax under their plan.
The tax plan comes at a particularly contentious time for the Labour Government, with the Greens over the weekend doubling down in their bid for a wealth tax, saying Hipkins’ rule-out of a wealth and capital gains tax was meaningless if voters want them.
Hipkins has said he won’t budge, responding that the two smaller parties - which Labour would most likely need to work with to form a government - were “welcome” to try to get such a policy over the line without Labour’s support. He repeated that line when asked again today about Te Pāti Māori’s new policy.
