Finance Minister Grant Robertson has changed his tune on exempting GST from food, saying it's possible to work through the policy "boondoggle" he once derided, adding that his comments had been "in the past".
He told Q+A that GST exemptions had "obviously been proven to be possible" overseas and left the door open for his party to adopt the policy.
It comes after National deputy leader Nicola Willis claimed she had been leaked an unreleased Labour tax policy to remove GST from fruit and vegetables.
Neither major parties have released their full tax policies, 52 days out from the first votes being cast. Prime Minister and Labour leader Chris Hipkins has refused to confirm or deny that GST exemptions will be part of his election tax policy.
Speaking to Q+A, Labour's finance spokesperson appeared more optimistic about how GST exemptions could work. He has previously criticised the policy as a "boondoggle".
"Look, I've made those comments around that in the past," he said. "You can look around the world and see some issues where those sorts of schemes have been put in place.
"Equally, you can see that many countries in the world have those schemes, and so, you know, boondoggles can be worked through. Once upon a time, someone called the Sydney Opera House a boondoggle, and I think everyone likes it now."
Te Pāti Māori has advocated going one step further and removing GST from all food sales, which it pushed in its tax policy release earlier this week.
Several economists have rubbished the plan - suggesting that the policy would be difficult to administer and fails to target money towards lower-income earners.
The party's co-leader Debbie Ngarewa-Packer has said that complexity concerns relating to the policy were a "sort of red herring". She told Breakfast that urgency was needed on food insecurity which demanded a "blanket approach".
Eric Crampton says you could "do a lot more good" by simply giving money to lower-income communities. (Source: Breakfast)
Robertson himself described the idea as an "absolute boondoggle" whilst speaking to a business audience in March last year.
The Oxford English Dictionary defines "boondoggle" as meaning: "A trivial, useless, or unnecessary undertaking; wasteful expenditure."
Robertson said in March 2022: "GST is a comprehensive tax which makes it very easy to administer, and people in the room who've been in other countries with more exemptions will know it becomes an absolute boondoggle to get through.
"If you do it off fresh fruit and vegetables, or even staple products, then you get into an argument of what's the difference between beetroot and canned beetroot.
"If you want to make a real impact on the lowest income people, you wouldn't cut the tax off fresh beetroot - that's not what people on low incomes buy.
"Then you'd have to go back to GST off everything, and again then you get to that being such a significant part of the Government's overall tax take that you would be cutting services all over the shop if you did that."
But speaking today, he said: "Internationally, it's obviously been proven to be possible… the ability to be able to have differentiation in terms of the equivalence of GST."
Asked how he would work through a "theoretical boondoggle", Robertson said: "You work through, and you find out ways of doing things and implementing things that address the issues that people are concerned about."
"As I say, this is a theoretical conversation, but all I would say is that in other jurisdictions around the world, people have found their way through the issues that arise.
"There are a lot of different studies about these things. There are a lot of different ways that different policies can be implemented.
"If it comes to pass, we can have those discussions."
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