2d ago

NZ should remove GST on meat and veggies

www.change.org

Sign the Petition

With the cost of living soaring, many Kiwi families are struggling to afford healthy food. Countries like Canada and the UK don’t tax basic groceries, and it's time New Zealand followed suit. Removing GST—or offering a rebate—on meat and vegetables would ease financial pressure, improve access to nutrition, and support better long-term health for all New Zealanders. Let’s push for tax policy that puts people’s wellbeing first. Sign the petition and help make real change happen.

12 comments

We went over this at the last election, it's a stupid idea, and the added complexity of the new GST scheme doesn't make this even remotely worthwhile.
No we shouldn't.
If we want to subsidize a set of foods; well why not just do that. A subsidy also will not limit you to 15%; it will not complicate a very simple tax.
We can get the effect we want in a more targeted and logical manner. We can also target any subsidy at NZ producers and make our locally produced foods more competitive against imported produce.
Flat taxes are regressive and generally bad; but making a bad tax worse by adding carve outs will not give us the outcome we really want.
- Dude. Hiting that nail on the head with a full swing there. If the government wants to help people at the low end of the economy buy food then... Do That! Use targeted subsidies to promote cheaper food.
  The economy isnt some Rube Goldberg Machine that you can reliably judge your effect on. If you want to affect a thing in the economy you are often far more effective directly affecting it.
- I have mixed emotions over all this.
  To start, I agree, flat taxes are regressive and a bad way to tax people.
  However, NZ gets a lot of tourists and GST is an effective way to collect money from them to fund the things they use. You could say just tax them directly, but I think a $1000 entry fee would put off many tourists that otherwise would come here and happily pay that much GST in their spending.
  We also have no true capital gains tax. Without this, GST is practically the only way we get tax from the ultra wealthy, right?
  So instead we could leave GST alone and provide subsidies to make fresh food cheaper, but that seems to also be making the system more complex by balancing tax collection against subsidies for the same thing, and also creating a whole chain of questions about where the subsidies go. Do we give them to potato farmers that then get pressured for cheaper prices from the duopoly, who don't pass along the full discount and end up subsidising their profits? (This will likely happen with removing GST too, but we won't have to work out which farmers get subsidies and which don't). If we subsidise farmers then we also subsidise overseas consumers that they sell to.
  So do we just hand cash to supermarkets to make certain products cheaper? This seems more complex than just removing GST.
  I have no view on what's the right thing here because it seems complex and like there might not be a right answer. But I am curious how subsidies would work in practice.
  
  We also have no true capital gains tax. Without this, GST is practically the only way we get tax from the ultra wealthy, right?
  This is a major problem with flat taxes; the ultra wealthy pay a tiny portion of said income/wealth in GST; vs the poor who pay a huge portion of their income in GST.
  but that seems to also be making the system more complex by balancing tax collection against subsidies for the same thing
  Not true; complicating GST, complicates it for all businesses. It adds compliance overhead to everyone; even though it would be minimal extra for most businesses, it is not zero. Not zero multiplied across all businesses is still millions in compliance dead weight cost.
  So do we just hand cash to supermarkets to make certain products cheaper? This seems more complex than just removing GST.
  A targeted subsidy; could be applied at the producer end, making the bureaucratic overhead much smaller. Thus giving NZ producers a leg up compared to overseas producers.
  This isn't as anti-competitive as it first seems either. Since feeding ourselves is a national security concern. It behooves us to prioritize local production, even in the event we have to subsidize production.
They should also do a sugar tax as well. A full block of chocolate is like $3 for almost 1000 calories.
- This is a good idea; one way to look at taxes are market signals.
  By subsidizing healthier foods whilst at the same time taxing unhealthy foods; we signal to the market what we want to happen.
  In my opinion; this is far better than either outright bans; or the current free-for-all system.
  One could easily paint it as social manipulation; but the government engages in this kind of manipulation all the time anyway.

12 comments