Labour's promise to remove GST from fruit and vegetables if re-elected should be viewed as part of a broader "package" tackling the cost of living crisis, the party's finance spokesperson Grant Robertson said.
Labour confirmed the policy on Sunday, weeks after National first claimed it was the governing party's plan.
It will cost about $2 billion over four years, will apply only to non-processed fresh and frozen fruit and vegetables and is expected to save every household just shy of $5 a week.
It comes after Robertson opposed the idea last year, expressing concern over whether the benefits would be passed on to shoppers.
Asked about his change in stance, Robertson told Breakfast this morning: "Three things.
"The first is that we now have a Grocery Commissioner whose job it is to make sure that supermarkets are behaving properly and fairly, so we've got someone who can do that work to ensure that the benefits are passed on," he said.
"Secondly, I've had a good look at the systems overseas and I can see that they can work as long as you have clear rules.
"Thirdly, I was concerned to make sure that we had a system that all New Zealanders could benefit from.
"It's not just fresh fruit and vegetables, it's also frozen fruit and vegetables as well."
Robertson stressed that the policy should be viewed alongside Labour's other cost of living measures.
"It goes along with cutting the prescription charges, free public transport for kids, cheaper early childhood education.
"We know that our supermarkets are making big profits, that's why we're making some changes in that space," he said.
"This is an opportunity now for us to use those powers to make sure supermarkets do the right thing."
Robertson also said there would be "a couple more" cost of living policies to come from Labour "in the next little while".
"You've got to see it as a cost of living package, and I think it stacks up pretty well against National's tax cuts," he added.
And yesterday was Labour's full tax policy, Robertson said. He said the party wouldn't introduce a tax-free income bracket.
National's finance spokesperson Nicola Willis says the policy is desperate and that's caused the error. (Source: 1News)
'It doesn't get passed on' - tax expert
AUT tax lecturer Ranjana Gupta said she didn't think the move was a good idea. (Source: Breakfast)
AUT tax lecturer Ranjana Gupta told Breakfast: "I do not think it is a good idea to remove GST from fruits and vegetables."
She expressed concern that the tax removal wouldn't be passed on to consumers.
"Not only supermarkets, it's from the producers," she said. "It doesn't get passed on.
"The sellers have to sort out their products into exempt category and taxable category, and that involves compliance cost."
Robertson disagreed: "It's really important to note that what we're doing is zero-rating of GST.
"It does mean that, in the supply chain, people will still be able to claim their GST back, which is what they do now.
"It's at the end of the supply chain, where consumers are the ones who end up paying the GST, which will now be zero-rated."
Greens, ACT weigh in
ACT's deputy leader Brooke van Velden and Green MP Chlöe Swarbrick both expressed concerns around compliance costs. (Source: Breakfast)
Later on Breakfast, ACT's deputy leader Brooke van Velden said: "Everybody knows that it's not actually a good idea.
"We have to acknowledge, the cost of living is going up for a lot of people, so it probably sounds like a really good policy.
"But this policy is not going to actually deliver savings for people who are struggling to find food at the supermarket."
She said it would benefit people who already buy a lot of fruit and vegetables more than those who really need it, and echoed Gupta's concerns around compliance costs.
Green MP Chlöe Swarbrick was also critical of the idea.
"You hear that we're gonna have cheaper fruit and vegetables," she said. "[But] things are going to get more complex and potentially more unwieldy, and more expensive to facilitate.
"There are better ways to achieve the outcome of ensuring that lower-income people have the income that is necessary to afford the essentials."
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