Tax dodgers, GST on food top NZ First hit list

Winston Peters says the policies aim to tackle inequality. Photo / Richard Robinson

New Zealand First would take GST off basic food items and rates bills and would target tax dodgers to fund the expensive policies, leader Winston Peters said yesterday.

But both proposals have already been tagged as difficult to implement.

NZ First's August 10 campaign launch is still three weeks away but Mr Peters used his 21st anniversary conference speech to party members in Auckland to unveil the vote-grabbing policies.

His own address and those of guest speakers focused on growing inequality and he said the two measures would act as a "circuit breaker" to tackle that.

In a supercharged version of the previous Maori Party and Labour policy to make fresh fruit and vegetables GST-free, Mr Peters said NZ First would remove the tax from "all the basics of the household food budget".

The move would not include soft drinks, snacks and luxury foods.

"We don't think highly sugared and bad-for-you fizzy drinks are something we should be supporting."

While Labour's policy, abandoned months ago, would have cost $250 million a year, Mr Peters said his policy would save New Zealanders but cost the Crown a whopping $3 billion a year or thereabouts.

"This bold policy aims at the heart of the inequality undermining our society."

Also "as part of a fair system" NZ First would remove GST from rates on residential property.

"This tax-on-a-tax deceit has to end, and it will," Mr Peters told around 150 party faithful at Alexandra Park.

He did not provide details on how much that policy would cost, but with local authorities raising more than $7 billion a year in rates, the Crown would lose hundreds of millions of dollars in revenue.

However, in an echo of Labour's plan to fund its big-ticket items, Mr Peters said the policies would be funded through "a clampdown on tax evasion and the black economy" which he estimated was worth $7 billion a year.

He provided little detail on which areas of tax avoidance the Crown would target other than cash jobs by tradespeople.

However, he referred to his record in taking on tax dodgers, including his crusade over the "Winebox" tax dodge more than two decades ago.

Taxpayers Union executive director Jordan Williams said he welcomed Mr Peters' recognition that New Zealand families were over-taxed, "but introducing new complexity to GST won't reduce the burden".

Local Government NZ president Lawrence Yule said his organisation supported the removal of GST from rates "in principle", but it would be complex "because rates are made up of a combination of both tax and other charges, which are different for every local authority in New Zealand".