Paddy Gower Has Issues: PM Chris Hipkins refuses to rule out removing GST on potatoes as price of hot chips soars

  • 27/07/2023

Prime Minister Chris Hipkins is refusing to rule out removing GST from fruit and vegetables ahead of a major tax policy announcement by Labour.

Hipkins opened up the possibility of removing the 15 percent tax during an interview with Paddy Gower Has Issues community investigator Karen O'Leary.

O'Leary was asking the Prime Minister about a specific aspect of the cost-of-living crisis - the ever-increasing price of hot chips. 

Some bowls of chips now cost up to $14, with the increasing cost of potatoes to blame.

Asked if Labour would remove the GST on potatoes so chips can be more affordable, Hipkins said: "More affordable chips would be a very good thing. In terms of our GST policy and tax policy, you will have to wait a bit longer."

Labour is due to announce its tax policy any day now, before the Election campaign begins.

Hipkins has formally ruled out both a capital gains tax and wealth tax but has not made any undertaking about taking GST off food. 

It is hard to read too much into his comments to O'Leary about potential changes to GST, with political insiders saying Hipkins is "refusing to rule out" many tax changes as a stock answer to try and build hype about Labour's announcement.

However, there is no question taking GST off food in some way would be massively popular during an Election that will be fought over the cost of living crisis.

In fact, it could be a game-changer - a Newshub-Reid Research Poll last year found 76 percent of New Zealanders would support the move. 

The Labour Party had previously campaigned on taking GST fruit and vegetables at the 2011 election.

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Taking GST off food is currently a policy of Labour's likely coalition partner the Te Pāti Māori.

However, the policy would lead to a big loss of tax income that would have to be made up in some other way - such as raising the personal tax rate.

Hipkins refused to be drawn any further, telling O'Leary - "I'm very reluctant to make up chip policy on the fly."

The showdown between Prime Minister 'Chippy' and O'Leary came at the end of an investigation into the rising price of hot chips.

The comedian's research revealed she was paying as much as 17c per chip when buying hot chips from bars and cafes, a figure she thinks is too high.

Kiwis agree, with locals saying they would only expect to pay $6-$7.50 for a serving of chips at an establishment, but actual prices can be double that.

"A box of fries has increased by $13 (since the pandemic)," Bebemos Cafe manager Sean says of sourcing the product to sell to customers. "It's devastating".

During the sometimes irreverent interview with O'Leary at the Beehive, Hipkins did rule out other options to deal with the price of chips, such as making expensive chips an imprisonable offence and buying every Kiwi a bowl of chips. 

Hipkins, a known sausage roll aficionado,  said he was also a fan of hot chips: "Hand cut, deep fried with tomato sauce. Perfect." 

Patrick Gower hosts Paddy Gower Has Issues - watch it on Three or ThreeNow.