GST Change Would Be a Backwards Step

“Labour’s new policy of exempting fresh fruit and vegetables from GST would make our tax system more complex and less efficient, and would cost us $250 million that we do not have,” says Steve Thomas, Researcher at Maxim Institute.

“A clear, single GST rate on all goods and services gives us that clean system we need. Introducing exemptions creates more mess and complexity, which inevitably bumps up the amount of money wasted on administering the system,” argues Thomas. “Both the Tax Working Group and the 2025 Taskforce were careful to say that exemptions on GST should not be introduced, with the 2025 Taskforce declaring that our comprehensive collection of GST is ‘widely-admired.’ We need to attend to their advice.”

“From a practical perspective, exempting fruit and vegetables from the GST system is also fairly arbitrary. By privileging one particular “good” and singling it out for exemption you are, by default, presuming those other things to be of less value. Why not exempt running shoes? Why not exempt doctors visits?” asks Thomas.

“Tax is about the government collecting what it needs from the public to do its business,” says Thomas. “The more efficiently and simply the government can collect tax, the better. We ought to retain a clear, single GST rate on all goods and services.”

ENDS

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