One of the most difficult tasks for an opposition party leader is getting noticed so if media exposure is a measure, Phil Goff did well with his suggestion that Labour would exempt fresh fruit and vegetables from GST.
He’s been on the radio, TV and in the papers talking about it.
But it’s good publicity about a really bad idea.
Exempting fresh fruit and vegetables from GST would increase the complexity of our tax system and compliance costs and make only a tiny difference in the retail price of food.
I bought a bag of 17 carrots this morning. They cost $2.99 which is about 17 cents each. If GST goes up to 15% it would add about a cent to price of the bag and 1/17 of that to each carrot.
If there was no GST on vegetables each carrot would cost about three cents less.
That is too little a saving to justify the extra expense of complicating our GST system, especially as it would increase pressure for more exemptions which would mean more complexity and higher compliance costs.
If fresh vegetables are exempt why not frozen ones, which may retain more nutrients than ones which are eaten several days, possibly weeks from harvest?
Why imported grapes and avocado but not locally produced milk which is just as important as fruit in a balanced diet?
If people aren’t buying and eating enough fresh fruit and vegetables, GST isn’t the problem, it’s low incomes, poor education and poor choices.