No GST on Fresh Fruit and Vegies

Forums › Off topic › No GST on Fresh Fruit and Vegies

Byrned

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#92837 7-Nov-2011 16:41

So, looking at Labour's policy of no GST on Fruit and Veg to make it affordable to struggling families seems to me to be at odds with their policy of introducing the ETS to agriculture in 2013 - surely this would have the effect of increasing the price, and canceling out some, maybe all or more of any effect of the former?

Or have I missed something?

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#542089 7-Nov-2011 16:47

Its a bribe. Trying to buy popularity without actually doing bugger all.
Except creating massive loopholes and conflict.
Taking 15% off healthy things is not going to make those people currently buying other foods buy fruit and veges.

Add to that Labour themselves don't understand it, Phil Goff saying a pre packed salad with mayo is GST exempt
when one of his cronies is saying no it's not...

But yeah, adding agriculture to the ETC will put the prices up so it won't make bugger all difference to the people in the markets.

talisker

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#542090 7-Nov-2011 16:48

Byrned: So, looking at Labour's policy of no GST on Fruit and Veg to make it affordable to struggling families seems to me to be at odds with their policy of introducing the ETS to agriculture in 2013 - surely this would have the effect of increasing the price, and canceling out some, maybe all or more of any effect of the former?

Or have I missed something?

No, it's very simple. The role of policies is not to improve things for people, it's to get the party elected.

Removing GST on fruit and veg - makes Labour look as if they care about healthy eating and helping those on lower incomes. ETS - makes Labour looks as if they care about the environment. The fact that one will cancel out the other - won't be noticed by 95% of potential Labour voters. Job done - great policies.

6FIEND

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#542093 7-Nov-2011 16:50

And additionally, the policy *doesn't* remove the GST on any 'prepared' food... So, when you buy that Caesar Salad for lunch at your local cafe - you still pay GST on it (even though the Cafe owners will no longer have to pay the GST when they purchase the ingredients)

...instant margin for the food industry! (but I'm not expecting McDonalds to discount their prices anytime soon...)

heavenlywild

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#542094 7-Nov-2011 16:50

Just like petrol companies, supermarkets will come up with some lame excuse about how they have "already passed on the savings from the removal of GST (if this ever happens)" and so you won't see much of a price difference.

kiwitrc

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#542101 7-Nov-2011 16:59

Gee I wonder how long before this thread gets into a heated political debate and closed :)

Byrned

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#542108 7-Nov-2011 17:10

Well, it's important these things do get debated, doesn't mean it has to get personal.

I just happen to be a voter that doesn't just vote for xyz party every election, but actually look at the policies, and discuss pros/cons of each. This just seemed like like 2 policies that are at odds with what they are aiming to achieve.

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Regs

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Snowflake

#542109 7-Nov-2011 17:12

This is also labour's vehicle to create extra jobs. Think of the IT work that would be required to actually implement this policy!

Of course, the cost of veges will go up in price anyway as the companies look to recover the cost of IT system upgrades to handle the changes.

Where does that leave it? Rich get richer (IT workers, at a stretch), poor still have crappy diet.

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sbiddle

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#542112 7-Nov-2011 17:13

It's an unworkable solution when there aren't clearly defined differences between products. Goff says a loose lettuce won't be taxed but a bag will. How is this fair?

You either make all produce products GST free or you make none GST free. You can't have anything in between.

Zeon

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#542119 7-Nov-2011 17:29

Its a silly suggestion. Apart from the massive costs associated with the IT upgrades probably offsetting a lot of the savings, everyone will debate about what should actually be included. And if food increases in costs 10% per year its not really helping the root cause is it?

I think having GST as a flat rate across everything with no exceptions is a great system as it gives good certainty and still achieves the point of GST.

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SaltyNZ

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#542123 7-Nov-2011 17:34

The equivalent debate in Aus got very heated, and the system is complex. In the end it made no noticeable difference: 'essentials' (it wasn't just fresh fruit and veges) went up about the same as everything else.

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alasta

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#542124 7-Nov-2011 17:34

6FIEND: And additionally, the policy *doesn't* remove the GST on any 'prepared' food... So, when you buy that Caesar Salad for lunch at your local cafe - you still pay GST on it (even though the Cafe owners will no longer have to pay the GST when they purchase the ingredients)

...instant margin for the food industry! (but I'm not expecting McDonalds to discount their prices anytime soon...)

That's not correct. If the retailer is not incurring any GST on their supplies then they will not be able to reclaim the GST on their return as they otherwise would.

Remember, GST is a tax that is ultimately paid by the end consumer. The supply chain is GST neutral.

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SaltyNZ

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#542129 7-Nov-2011 17:46

Byrned: Well, it's important these things do get debated, doesn't mean it has to get personal.

I just happen to be a voter that doesn't just vote for xyz party every election, but actually look at the policies, and discuss pros/cons of each. This just seemed like like 2 policies that are at odds with what they are aiming to achieve.

I'm a voter who thinks that anyone who WANTS to be elected to govern should be automatically disqualified from doing so...

Random selection to parliament rules! Just like jury duty, but with more name calling.

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NonprayingMantis

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#542130 7-Nov-2011 17:47

it's a logistical and technical nightmare to introduce., and the only people who will benefit will be the lawyers

http://www.vatcalculator.com/news/the-curious-case-of-the-jaffa-cake

mattwnz

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#542132 7-Nov-2011 17:59

The thing about GST is that it is simple. Removing it from fruit and veges, or from the staples, will just increase complexity, and open up arguements for it to be removed off other things, such as GST on rates, which is a tax on a tax.
I liked JKs arguement, you remove gst off fruit, but you then have to work for another two years to pay it off.

One policy I think people have missed, is that I saw on Q&A that labour plan to borrow, to then invest that money in the overseas stock exchange to pay for our super. Who borrows money againest their house, to then invest in the stock exchange? I think it is a abit of a gamble in todays markets. I think that is a more important debate that this GST on food / vote grabber.

nickb800

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#542135 7-Nov-2011 18:04

Ive heard that with the UK's far more complicated VAT, you could buy fresh fish from a fish shop tax free, but deep fried it had tax added. So for chips from the F&C shop, theoretically you could buy raw spuds from them and pay a slicing and deep-frying fee to minimise the GST paid.

Silly law, seasonal variation in fruit & vege price will dwarf the 15% saving. Teach people to stop buying capsicums in winter first!

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