National scorns Labour's power and GST free fresh produce policies

Phil Goff. Photo / Paul Estcourt

Efforts by the Labour Party to promise lower power bills have been labelled "cheap, populist rubbish" by Finance Minister Bill English because of Labour's track record on electricity prices.

Opposition leader Phil Goff yesterday formally launched the policy of GST-free fresh fruit and vegetables, which he said would save a household between $300 and $400 a year.

"It makes a difference, but by itself it won't be enough. We'll have other policies also."

Mr Goff said Labour would announce details on savings, skills programmes and monetary policy in the lead-up to the next election.

He also floated the idea of demanding less revenue from state-owned power companies to ease electricity bills.

"As long as the Government keeps treating the dividend from power companies as a form of taxation and gets hundreds of millions in dividends, your power prices aren't going to come down," Mr Goff said.

But Mr English said Labour had no credibility on electricity prices.

"It's cheap populist rubbish. Electricity prices went up by 70 per cent while they were in charge."

He also attacked Labour's policy of GST-free fresh fruit and vegetables as making no financial sense because it would mean borrowing more to fund a saving of $1 a week per person.

"They'd get $1 a week more in debt and interest on that debt, so actually from a financial point of view they're no further ahead. It's a political gimmick."

Labour says the policy would cost $250 million, which could be mostly offset by revenue from tobacco excise taxes. Mr English did not think it would make eating habits any healthier as fruit and vegetables prices had already fallen 11 per cent over the past two years.

The policy would only apply to fruit and vegetables that have not been frozen or processed.

That would exclude items including salads in restaurants, fruity bars or fruit-based spreads or ice creams, and frozen peas.

Mr Goff said the narrow definition would keep it simple and avoid difficulties in implementing the policy.