Critics of GST say removing it from food will enable families on tight budgets to stretch their money further. Photo / Sylvie Winray
Critics of GST say removing it from food will enable families on tight budgets to stretch their money further. Photo / Sylvie Winray
OPINION
On January 9, a strange tradition was upheld in Parliament. A bunch of bingo numbers go into a blue and white biscuit tin. It’s given a shake. Then a parliamentary worker pulls out some out. This is how members’ bills get picked. They aren’t like government bills, wherethe Government of the day sets out the legal changes that it wants to deliver. Instead, they are an opportunity for ordinary MPs to suggest changes to the law on issues that are close to them and their communities.
At the January draw, one of the numbers belonged to Rawiri Waititi, the Te Pāti Māori co-leader. His bill would have seen GST withdrawn from all food, not just fruit and vegetables as was proposed by Labour at the last election. GST would still be applied to alcoholic drinks but apart from that, everything would be tax-free.
Te Pāti Māori co-leader Rawiri Waititi during Question Time in Parliament. Photo / Mark Mitchell
GST is seen by many people as one of the most regressive taxes. That’s because it’s charged regardless of your ability to pay. For Te Pāti Māori and for many others, applying a regressive tax on an essential item like food prevents too many whānau from putting decent kai on the tēpu. Removing it should increase its affordability and make those tight family budgets stretch a little further.
Sometimes in politics your friends don’t share your sense of adventure. Labour’s election 2023 campaign pledge to remove GST on fruit and vegetables was widely panned by economists. They complained it wouldn’t lead to important change. They complained supermarkets would steal all the difference. They complained it would cost too much.
Being burned on GST during the election campaign may be why Labour, as well as the Greens, failed to support Waititi’s bill when it came up for its first vote in Parliament. That’s disappointing for several reasons, primarily because it shows a real lack of political imagination. Labour and the Greens could have chosen to support this bill beyond the first reading. That might have given it a fighting chance of getting a Select Committee hearing – and with it a real chance to investigate why we have food poverty in Aotearoa.
We might have had the chance to talk about living in a country that produces enough food for 40 million people, yet we have children hungry every day. We might have spoken about why the Government is making food affordability worse by cutting the minimum wage and benefits in real terms. About why they are thinking about taking away food in schools. Why do supermarkets get to make huge profits? Why are there parts of New Zealand that don’t have access to affordable fresh food?
Fruit on display at the Newtown Countdown supermarket in Wellington. Photo / Mark Mitchell
It could also have been a chance to showcase how the three parties could work together on an issue that is of obvious mutual benefit. Labour cares about this issue. It’s core to its values. Tackling food poverty is the same as tackling child poverty. Te Pāti Māori cares about this, as GST impacts every Māori community across the country. The ends might be different, but the problem is shared and understood. Tackling this together could have been the start of building a stronger relationship heading into 2026.
Instead, we now have the situation in which Labour voted against a policy that was akin to one of its core offers at the election just five months ago. This situation calls for a rethink – not just on this but on a range of other areas. We have about 900 days until October 1, 2026. The left can’t waste any of them when it could be building the case for a change of government, nor can they waste any days by missing opportunities to show the damage this Government is doing. The left must build a broad coalition of those who want to tell that message.
Prime Minister Christopher Luxon during the post-Cabinet press conference at Parliament. Photo / Mark Mitchell
This Government is not polling well – most people think the country is going in the wrong direction, Christopher Luxon is the most unpopular National PM since Shipley. But to win, the parties of the left will need to show they have vision and that they can work together. GST was a lost opportunity for that, but there will be others.
Given Hipkins’ new openness to developing a fair tax alternative, perhaps taxing capital profits to pay for better public services or lower tax on workers is the opportunity for the left to show unity and vision together. Here’s hoping they don’t miss that chance, too.
