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Labour gone cold on GST-free food

Monday 25 Mar 2013 5:13 p.m.

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Labour is considering going back on one of its major election promises – GST-free fresh fruit and vegetables.

It says it has to prioritise, but the tax break would be the third major policy the party's scrapped since the last election, if they go back on it -  and the Government says it's impossible to know what Labour now stands for.

"If we can't afford policies then they will have to go. GST off fresh fruit and veg is one thing we're looking at," says Labour leader David Shearer.

It was a major election promise in 2011 pushed by former leader Phil Goff.

"Labour's plan is a bold one. It's a game-changer. It's about fairness," said Mr Goff at the time.

But that boldness and fairness didn't win Labour the election, and with Mr Goff gone so too went the policies. The plan not to tax the first $5000 earned has gone, and restarting contributions to the New Zealand Super Fund has also been scrapped.

Labour's determined to appear as fiscally responsible as possible but has already committed to big-ticket policies.

Its affordable housing plan has a $1.5 billion start up, but Labour says it pays for itself over time and research and development tax credits are worth $170 million, according to 2011 figures. Universal KiwiSaver is worth $374 million.

"We're going to have to throw out some of the policies that are going to cost us a lot of money," says Mr Shearer.

GST-free healthy food would cost $317 million, and would be tricky to enforce.

Mr Shearer says its savings and jobs policies are more important.

"How does that fit with GST off fresh fruit and veges? Can we do it all? I doubt if we can. We're going to have to prioritise," he says.

So Mr Shearer's refusing to say outright whether the policy will definitely go, but all signs point to it being too costly, too difficult and too low down the list.

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