Election 2023: Labour's tax policy leaves sour taste for Green Party, ACT

The Green Party and ACT have squashed Labour's newly announced tax policy like tomatoes on the supermarket floor dubbing it "disappointing" and "unfortunate".

On Sunday, Labour leader Chris Hipkins announced the party would run at the election with a tax policy that included removing the goods and services tax (GST) from fresh and frozen fruit and vegetables and increasing the amount paid out through Working for Families.

The GST policy would save average households about $4.25 per week from April 1 next year, which is also when Labour would increase the amount given to families with children by $25 per week to $97.50 per week. Overall, about 175,000 households would be about $47 per week better off under Labour's policy once abatement thresholds for Working for Families were lifted in 2026.

"Since becoming Prime Minister my focus has been on delivering cost savings across the key expenses families face," Hipkins said on Sunday.

"While taking GST off fruit and vegetables isn't a silver bullet, alongside other measures to reduce costs we're delivering a meaningful difference."

It's part of a 10-point cost of living plan from Labour, which includes changes already introduced at the Budget like removing $5 prescription fees and making public transport free for some. A few further policies are expected later on the election campaign trail.

But on Monday, ACT and the Green Party were united in their disappointment with the policy. 

ACT leader David Seymour told AM anyone who knows "anything about tax says this is one of the worst possible things you could do".

Seymour told AM's Laura Tupou the policy would put about $4 a week into Kiwi's back pockets and mostly benefit supermarket chains "that Labour's supposed to be cracking down on".

"The rest will go to the wealthiest people buying fresh raspberries and fresh blueberries. I mean, there's just nothing good."

Green MP Chlöe Swarbrick agreed. Swarbrick said the benefits of the policy will "aggregate towards the top end of town".

Swarbrick said the policy "doesn't really seem all too fair" especially after Labour's own tax report revealed the top 311 families in Aotearoa own 2.4 percent of the wealth. 

"Labour could have moved forward with tax justice, which obviously is supposed to be kind of the underpinning of the ostensible Labour movement. But what we've seen here is, I guess, is them back themselves into a corner politically."

"It is really unfortunate."

Seymour believes Labour is "completely out of ideas" and says he's "just disappointed for New Zealand". 

"These guys have run out of ideas, they've run out of people, they've run out of other people's money. It's time for them to go."

Former National Finance Minister Steven Joyce joined AM to speak about his new memoir 'Steven Joyce On the Record' and weighed in on the policy. 

Joyce believes the announcement "smells a little bit desperate irrespective of the debate about it".

"I think it's reasonably universally agreed it's bad policy, which doesn't make it bad politics but to me, the bigger issue with it is probably it's starting to smell a little bit desperate."

"You don't wanna smell desperate going into an election."

Watch the video above for more.