Dunne: Labour irresponsible on GST

Labour's about-face in advocating removing GST from fresh fruit and vegetables after years of arguing for the simple GST system we have, is more about the main Opposition party polling at 30 percent than the health of New Zealanders, Revenue Minister Peter Dunne said today.

"This is cynical politics masquerading as concern for public health, otherwise why has it taken them so long to come to this position?" Mr Dunne asked.

"This isn't a conversion on the road to Damascus; it is principle-free panic on the road to electoral defeat," Mr Dunne said.

"There is no other explanation for a total reversal of a long-held policy that makes sense. We have a GST system that works well and is simple.

“Absolutely, we must address important health concerns, but sabotaging our tax system is not the way to do it,” he said.

"I was Revenue Minister in Labour-led governments that staunchly defended the integrity of the GST system we have. So what has changed other than Labour's position in the polls?

"This is the worst kind of flip-flopping – the kind you do when you don't even believe your own rhetoric.”

Mr Dunne said the change would probably cost at least $250 million and force retailers to recalibrate their cash registers to take out fresh fruit or vegetable items.

"No account is taken of the cost of claiming a GST refund to produce those tax-free items.

“And it is so arbitrary that other unprocessed items like meat, poultry, fish, and eggs would somehow be in the tax net, but not fresh fruit and vegetables.

“One has only to look at what happened in Australia when something similar was tried.

“The great example was that of John Hewson, Paul Keating, and the ham sandwich.

“The ham by itself was exempt of GST and the bread by itself was exempt from GST, but the sandwich was subject to GST.

“Labour proposes taking us down this absurd path for a dollar a week gain for Kiwi families?” Mr Dunne said.

ENDS

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