Budget 2023: Iwi call for tax-free fruit and veges after cyclone, cost of living crises

As vegetable prices continue to increase and inflation bites, iwi leaders say the one change they want to see in Thursday’s Budget is the removal of GST from fruit and vegetables.

The recent extreme weather, following strong inflation, has compounded pre-existing health and inequity crises, says Iwi Chairs Forum leader Mike Smith.

Smith, who is from the Far North iwi, Ngāpuhi and Ngāti Kahu, said kūmara crops had been smashed in Northland, and he knew of similar devastation in other rohe.

“Dargaville​ is one of the major kūmara growing areas in the country, and they’ve lost probably 80% of their crop there – which is leading to the very high price of kūmara,” he said.

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“There’s already a cost of living crisis, and this is being exacerbated by the cyclone’s impacts on food growing areas.”

Finance Minister Grant Robertson has indicated this will be a “no frills” Budget. He will deliver it on Thursday afternoon.

He said it would be focused on issues such as the cyclone recovery, and the cost of living. Its tag line, which he showed reporters on Wednesday morning, read: “Support for today. Building for tomorrow.”

Prime Minister Chris Hipkins said there would be no significant tax changes outlined in this Budget.

Smith said he was hoping that removing GST from heathy food would make it into the Budget. However, last week Robertson said it would be too difficult to exempt food from GST.

“It’s a very, very challenging thing to administer,” he said, adding that he thought supermarkets would likely benefit more than consumers.

Te Pāti co-leader Rawiri Waititi said he would be pushing the Government to remove GST from all kai. He said GST on kai was punishing low income whānau, who had to spend more of their income on basics like food.

Smith said taking GST off fruit and vegetables would have flow on effects beyond just limiting inflation.

“We need to remove GST from healthy food. It would certainly alleviate the spectre of child poverty, which is increasingly a problem,” he said.

“We are suffering from a diabetes and obesity epidemic. Look at the ‘treat’ foods, the processed food, that people are able to easily afford – that’s what families are having to eat instead of good, healthy food.”

Neither Labour nor National supported the idea to remove GST from kai, but lobby groups from various fields have voiced support for the idea.

Ahead of Budget Day, the Child Poverty Action Group and Restaurant Association both joined calls for Robertson to remove GST from food.

A survey from the Auckland Business Chamber also showed 20% of business respondents wanted to see changes to GST. However, chamber boss Simon Bridges said those changes shouldn’t necessarily be specific exemptions, as he agreed it would complicate the tax system.