Maori Party - Take the GST off healthy food

Rahui Katene, Finance Spokesperson
20 January 2010

Maori Party finance spokesperson, Rahui Katene, has welcomed the Government’s statement this afternoon that any changes to the tax system would have to meet tests of equity and fairness, alongside delivering benefits for households and the economy.

“In that context, the recommendation from Bob Buckle’s Tax Working Group that GST should be raised to 15% clearly doesn’t make sense”.

“If we want to do anything to achieve equity and fairness it would be to remove goods and services tax from healthy food”.

“I have a private members bill all ready to go, which will address rising food prices and the impact this has on the ability of those in low income households to purchase healthy food by exempting this food from goods and services tax” said Mrs Katene.

“While all consumers will benefit from the removal of GST from healthy food, those on lower incomes spend a greater proportion of their income on food and will receive a significant benefit as a result. Research conducted both here and overseas shows that lowering the price of healthy food, including via the removal of taxes similar to GST, leads to a significant increase in the purchase of healthy food”.

"Increases for the staples of a nutritious diet – such as fruit, vegetables and milk – have been particularly high. It is increasingly important that healthy food be affordable".

“If Mr English is really keen to help families to get ahead, he will be ringing the Maori Party to place my Bill on the Government’s Order Paper” said Mrs Katene.

“What’s so positive about my Bill is that it not only seeks to exempt healthy food from goods and services tax but it is also about encouraging the purchase of healthy food” said Mrs Katene.

“That’s benefits for households, the economy and the health of the nation all in one clean sweep”.