Editorial: Labour whips up a tax stew with two months to go

Prime Minister Chris Hipkins. Photo / Michael Craig

Labour’s policy to remove GST from fresh and frozen fruit and vegetables is likely to be popular with the public as grocery bills are a constant reminder of cost of living pressures.

Prime Minister Chris Hipkins announced the 15 per cent tax would be removed on specific items if Labour is re-elected.

Hipkins stressed that it was part of a wider cost of living package and with other measures, low and middle-income Kiwis would be better off from next April.

“Our 10-point cost of living package includes free doctor’s prescriptions, cheaper childcare and 20 hours [of] free ECE for 2-year-olds, free or half-price public transport for children and young people, and now GST off fruit and vegetables and a $25 boost to Working for Families – and there’s more to come.”

A drawback of the GST pledge is that monthly savings for households are expected to be small. It also alters the broad base and uncomplicated nature of the GST tax and reduces revenue.

Critics argue the GST plan is more about politics than economics and will be difficult to implement. It also won’t impress people who believe major tax reform is needed.

However, a Talbot Mills poll found 66 per cent support for the move. That popularity was obvious from National’s attempts to chop it up before it reached the table.

National has its own nakedly voter-luring policies, which Hipkins took a verbal knife to, and there are others out there which would appeal to many, such as the Green Party’s pledge on dental care.

The GST move has a simple selling point, and feels more real and likely to happen for voters than some of the promises aired so far in the campaign.

Being in Government does help a party when making such promises. The public is used to announcements resulting in changes, such as with the clean car discount and the former fuel relief scheme.

Labour is in a state where it needs some simple messages as it seeks a popularity boost.

At present, we are in a no man’s polling land, as serious pitches are being made to voters before early voting starts in October.

Polling so far has shown Labour gradually slipping from its bump after Hipkins took over and a National/Act combo doing well enough in recent times to be slight front-runners. But polls are still very tight on whether the right bloc can get a majority of seats, and Labour remains within reach of nailing a ‘devil you know’ result.

The polls that are going to be more significant are clearly the ones closest to voting. There’s enough time - still two months until election day - on top of recent polling changes to be somewhat cautious about the likely result.

This month, polls have reflected Labour being at a low ebb. National has had a steady period in comparison, which helps the party argue its case that it is ready for government.

New Zealand First and the Green Party have made some gains and Act has a loyal level of support.

On the right, the rise of NZ First has set nerves jangling. Could the latching on to Winston Peters represent some voters wanting a counterbalance to Act; a ‘Mr No’ on a conservative government’s agenda?

If, as the saying goes, a week is a long time in politics, then two months could hold some surprises.