New Zealand’s ruling Labour Party pledges to exempt fruit and vegetables from GST

BLOOMBERG

New Zealand’s ruling Labour Party said it will exempt fruit and vegetables from the Goods and Services Tax (GST) if it wins a third term at elections in October.
Unveiling the party’s tax policy on Sunday in Wellington, Prime Minister Chris Hipkins also pledged to increase benefits for low-income families that he said would deliver an average of NZ$47 ($28) a week to 175,000 households when fully implemented in 2026. “The cost of living is the biggest issue facing New Zealanders in this election,” Hipkins said. “A lot of the people who oppose these changes aren’t the ones worrying about their weekly food bills. This policy is aimed at New Zealanders for whom every dollar at the checkout matters.”
Tax is shaping as a key battleground issue for the October 14 election. The main opposition National Party, which is currently ahead of Labour in opinion polls, is promising tax cuts.
Food prices have soared in a post-pandemic bout of rampant inflation, exacerbated by a cyclone in February that destroyed orchards, vineyards and farm crops in some of New Zealand’s most productive areas. Food-price inflation peaked at 12.5% in April, when fruit and vegetable prices surged an annual 22.5%.
The GST exemption would cost about NZ$2 billion over four years, while the support measures for low-income families would cost about NZ$1.4 billion over the same period, Labour Party costings show.