Episode description
Set the table for bread and butter - or in this case, fruit and veg: Labour fired its opening election campaign salvo on Sunday with a starkly populist pitch for tax-free produce. The party is pushing ahead with the pre-announced policy despite hiccups in the reveal and near-universal opposition from experts - including in its own ranks: a clear sign the party is putting polling ahead of principle. In this week's Focus on Politics, Deputy Political Editor Craig McCulloch assesses the political calculus behind Labour's vote-grabbing GST policy.
Labour leader Chris Hipkins at the GST announcement on Sunday.
"Some of the tax purists will say that we should not do this... they are not the ones who are struggling" - Chris Hipkins
Set the table for bread and butter - or in this case, fruit and veg: Labour fired its opening election campaign salvo on Sunday with a starkly populist pitch for tax-free produce.
The party is pushing ahead with the long-rumoured policy despite hiccups in the announcement and near-universal opposition from experts - including in its own ranks: a clear sign the party is putting polling ahead of principle.
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It was the week Labour woke up to the election. From his home turf in Lower Hutt, Labour leader Chris Hipkins announced the plan to cut GST from unprocessed fruit and vegetables - a cost-of-living balm in tough times.
Eating your greens went down a treat with supporters, and a poll last month from Talbot Mills - Labour's pollster - found two-thirds in support. Critically, 80 percent of swing voters supported it, and nearly 70 percent said they'd be more likely to vote Labour as a result. A balm, then, to Labour's sliding poll numbers too.
The policy runs counter, however, to expert consensus - including members of Labour's caucus - who have long rubbished the policy, tax theory and international evidence showing it would be little help to those struggling and impose new, expensive burdens on the tax system.
RNZ spoke to 12 tax policy experts and economists: the closest to a supporter that could be found was a former advisor to Finance Minister Grant Robertson saying it should be considered - but it wouldn't be his first choice.
Hipkins says the policy's not intended to help tax experts - but the government's own tax working group had highlighted that only a small portion of savings from removing the tax would flow through to lower prices at the checkout, the majority ending up instead in the pockets of supermarkets and producers. As an untargeted measure, the small savings that do get passed on would be of more overall benefit to the well-off: an inefficient way to help the needy, considering the cost to the taxpayer. …