Poverty Action Group management committee member and economist Susan St John is disappointed with Labour’s latest election policy announcements aimed at countering the rising costs of living.
“Unfortunately Labour has chosen to increase the Working for Families in-work tax credit, which doesn’t go to the 160,000 to 200,000 children living in the worst-off families,” she says.
“We need to be addressing and stopping the poverty and the pain that we’re having as a nation. It’s just despicable that politicians are making policy drops to placate the small 10% that they’re trying to get across the lines for voting and not looking at the intergenerational change that they could be making with their sphere of influence.”
Labour also intends to remove the GST from fruit and vegetables from April next year, if it is re-elected.
But St John and other critics say it makes a very small difference to low-income families.
$4 a week
“The GST change is going to deliver at best about $4 a week to the low-income families if they’re lucky and that’s going to be pretty meaningless really. I found it really disappointing.”
Te Pāti Māori co-leader Debbie Ngarewa-Packer says: ‘What we needed was radical transformation so that more than 50% of our population can start to afford to live.”
Ngarewa-Packer says removing GST from fruit and vegetables will help wealthier households more than it will lower-income households.
“We have a nation where 2.1 million people are living on less than $30,000 a year.”
Prime Minister Chris Hipkins agrees that millionaires spend more at the supermarket
Wealth tax needed
“But, actually, if you look at the proportions of the grocery bill that go on fresh fruit and vegetables, it’s lower-income New Zealanders that spend a higher proportion of their grocery bill on fresh fruit and vegetables.”
Economist Matt Roskruge supports Labour’s policy but also says there needs to be a wealth tax.
“I think there’s a lot of scope for increasing the tax in New Zealand on high-end earners and on wealth, especially if we want hospitals that are functioning and education infrastructure.
“All of these things need a lot of investment, a lot more investment than we’re putting in and so we probably need to think more seriously about increasing a high-income tax and wealth taxes in general.
“GST on fruit and vegetables is not going to make or break the bank.”