this post was submitted on 13 Aug 2023
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I'm not convinced. If implemented, you could never reverse it because you're just losing votes. That's a good reason why it's a thing overseas - they used it to buy votes and you can't remove it without losing votes. I also think our duopoly of supermarkets is one thing that separates us from most other western countries that have GST exemptions like this.
What I've seen the past few years is complaints about how when things like this happen, companies just absorb most of the savings as profit. With a duopoly of supermarkets, I can't see why after a few months fruit and veggies won't be back at normal prices, with the saving taken by the supermarket as profit.
Any thoughts on this angle?
Fresh fruit and veges is one area where there is real competition in the marketplace. Plenty of independent vege shops around (in the centres of population at least).
I can't remember the last time I bought veges from a duopoly supermarket. Fresh and Save, Fruit World, Tai Ping, etc are all good options.
I also don't normally but fruit and veggies from supermarkets. But the vast majority of people do, and that's what makes the duopoly.
And remember that every dollar exempted from GST is a dollar of tax that needs to be raised another way (or a dollar of government service that needs to be cut).
I guess I don't understand the intent. Are they trying to provide cost relief? Wouldn't removing tax on income under X amount be easier to administer?
Are they trying to encourage healthier choices? Maybe a sugar tax could help (a supermarket is unlikely to absorb a tax, but they will absorb a profit).
Although if this is a way to justify creating a commission to monitor supermarket profits (which they said they will do), then I could get behind that.
I think we, as "lay-persons", tend to only approach such issues from a single standpoint. I know I do, but I try to keep in mind that we do not see everything that goes into these decisions.
If I had to guess, I suspect these are the reasons behind this policy:
I think Labour should be braver, but I understand they feel they are losing their chances of winning the election and thus are playing it safe.
You make a lot of good points.
This is likely a big part. If they were clearly losing we would probably see more impactful policies. Since they have had two terms and know that's about when parties get voted out, yet they are still neck and neck with a right wing coalition, their best chance of winning is likely to make small adjustments that should be universally popular to gain a small amount in the polls, rather than going all out and risking a big drop in popularity.
I agree completely with your assessment.
My biggest complaint with NZ Politics is it seems people vote in the opposition just cause, rather than because they have good policies.