Goods and Services Tax (Removing GST from Food) Amendment Bill

I move, That the Goods and Services Tax (Removing GST from Food) Amendment Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider this bill.

Tēnā tātou. Well, I feel absolutely privileged to see all of these ex-MPs—and even Sir Geoffrey Palmer is here to hear the first reading of this bill—because at one point, they would have all been passionate about ensuring that we start to close the gap between the rich and the poor. So I rise to introduce my member’s bill, the Goods and Services Tax (Removing GST from Food) Amendment Bill, to the House today.

Just before I enter into the speech, I want to acknowledge all the whānau that supported and signed our petition. Near-on 20,000 people signed this petition to take GST off kai.

Look, Aotearoa’s experiencing a cost of living crisis. This bill looks to make immediate changes to allow our whānau the dignity to put kai on the table to feed their whānau and their babies. Therefore, a vote against this bill is a vote against eliminating poverty.

I wish that they treated this bill the same as they treated the last bill that’s just gone through the House, the Corrections (Victim Protection) Amendment Bill, where it was unanimous—where it was unanimous, that we were all agreeing on eliminating poverty in this House, not just addressing it. Because I hear a lot of the parties in this House—they want to address the poverty, but they don’t want to eliminate it.

GST is a regressive tax that disproportionately impacts lower-income whānau who spend their entire income to survive. If I’m making $10 an hour and you’re making $200 an hour, I’ve got to pay the same tax on that goods and services from the supermarket. If I send my five-year-old tamaiti, or child, into the supermarket, they’ve got to pay tax on whatever they buy. This is how regressive tax disproportionately impacts lower-income whānau, who spend their entire income to survive.

The removal of GST from food would recognise cost of living pressures and the reality that food products are a basic necessity of life that people should be able to access without taxation. Kai is a human right.

We have a broken tax system which has fuelled extreme wealth inequities here in Aotearoa, and it’s only getting worse. The richest 2 percent control 50 percent of this country’s wealth. Ordinary whānau are subsidising the lavish lifestyle of the rich. Ordinary whānau pay 20.2 percent on tax; the wealthy pay 9.4 percent on tax. Even today, Ipsos, the third-largest market-research company in the world, reported the primary concern for New Zealanders remains to be inflation—cost of living—with 59 percent of New Zealanders identifying it as a key issue.

If an apple a day keeps the doctor away but whānau can’t afford apples and can’t afford to go to the doctor, all whilst this Government has scrapped Te Aka Whai Ora, how do we look after the wellness of our people? If this House is so concerned with bread and butter issues but whānau cannot afford bread and butter, then what does that say about the morality of this House? It’s absolute hypocrisy and it’s disgraceful. Tangata whenua have never been afforded the privilege of experiencing a cost of living crisis, because they are still bearing the brunt of the cost of poverty. Not only that, but you’ve left your own people behind as well, where many tangata Tiriti are also experiencing the same hardship.

The supermarket duopoly—they made $400 million in the year. We need to break the duopoly. This is an and/and. Others will make speeches in this House saying GST has too much impact on the administration—has too much impact on administration. Others will sympathise with this bill, but will not go as far as supporting this bill to eliminate poverty from this country.

Between June 2019 and the March 2023 quarter, household living costs for all households had risen by 17.7 percent, and for Māori households by 18.4 percent. In fact, in the coalition Government’s 100-day plan to rebuild the economy and to erase the cost of living, they do not have a single item of urgency addressing poverty for whānau who are facing hardship. Instead, the Government introduced legislation to narrow the Reserve Bank’s mandate to price stability, repealed the fair pay agreement legislation, cut benefit increases, introduced legislation just to disestablish the Māori Health Authority, e kī rā! [really!] They’ve repealed amendments to the Smoke Free Environments and Regulated Products Act 1990, and so many more regressive, harmful, racist legislation aimed at further disenfranchisement for whānau. Because we know what is actually urgent, and that is that whānau can’t afford to buy kai.

Today, one in five tamariki Māori are living in poverty. This means their whānau can’t afford a safe home, essentials like regular healthy food, doctors visits, or to pay their power bills. Food prices have gone up 12 percent as of 2023, the biggest annual increase since 1989—and some of the ex-MPs that are up the back there would remember this.

In 2014, the Ministry of Social Development provided quarterly 92,167 food hardship assistance grants. In 2023, that number increased to 336,270—it increased by 265 percent. In the 2020 to 2022 time period, the New Zealand Food Network reported a 165 percent increase in the demand for food support following COVID. Those are extraordinary numbers. Those are extraordinary numbers.

This bill will automatically make a make a big difference to those whānau who are struggling right now. But it’s time for us to put politics aside and to actually address poverty and the hardship that many of our people are suffering right now. This is not an and/or; this is an and/and. Some of you will come up with other initiatives that you say are better. Our people cannot wait. They are starving right now. They are starving today. But they cannot wait for you to come up with other alternatives. This must be an and/and. Yes: taking GST off kai. Yes: breaking the duopoly, for our whānau, in those supermarkets—$400 million, in the year, made, taken overseas. Where’s the company tax on those particular corporate companies that have taken our money overseas? That money should be used for the greater good of Aotearoa. And so this is an and/and. Yes: doubling baseline benefits—absolutely an and/and; it should not be an and/or.

We’ve got to have a collective approach to this. We’ve got to prioritise poverty. We should not walk into a supermarket and see whānau walking down those aisles, having to put food back because they can’t afford it. This is not about food discrimination, where you’re saying, “Only fruit and veg.” E kī rā! [Really!]

So our whānau can go into a supermarket and you’re going to say, “You can go down this aisle because we’re taking GST off it, but you can’t go down that aisle. Only the rich go down that aisle. We’re going to discriminate against you from going down that aisle.” Everybody should have the dignity and the mana to be able to walk down those aisles and shop for whatever they want to without being taxed. Kai is a necessity—it is a human right. You shouldn’t be taxed for kai. We need to take GST of kai right now.

I’ll tell you what, people have tried to push Te Pāti Māori on to the left, on to the right—we are staying up the guts. We are in the middle, and we want to know who else is committed to running the ball up the guts. Pop me the ball! Who’s going to run the ball up the guts? Who’s going to commit to eliminating poverty? Who is going to support our people who are struggling out there? All eyes are on you. All eyes are on you. I know this House; I know where they’re voting—not you, Madam Speaker. All eyes are on us. All eyes are on us.

So I look forward to the debate. I look forward to seeing where everybody else votes, because Aotearoa is looking. The 20,000 people that supported our petition, and the 70,000 people that supported another petition last year, where they agreed that GST should be taken off kai. All eyes are on us, e hika mā! Who is here to eliminate poverty, or who is here to play politics?

This is about an Aotearoa hou, an Aotearoa hou where we will welcome you on to that marae. We will feed you, we will house you, we will care for you, we will love you. This is the bill. Kia ora tātou.

The question is that the motion be agreed to.

Well, thank you very much, Madam Speaker. And I wish to acknowledge Rawiri Waititi for that very energetic introduction there. I think what he was indicating there is he might be wanting to join the parliamentary rugby team, and we’re going to run it up the middle. As his co-captain, I welcome him to that team at any point. But as I said to the member as I came in and I acknowledged—and I won’t leave the House in any more suspense for any longer, but as the Prime Minister acknowledged in his comments at question time today, National will not be supporting this member’s bill today, and I acknowledge that.

But, look, before I delve into why National will not be supporting this member’s bill, I want to extend my congratulations to the member for getting this bill drawn in the ballot.

The primary reason why National will not be supporting this bill is because of the staggering fiscal cost that this change will incur.

Rawiri Waititi: Oh, the administration—I knew you were going to say that.

Hon SIMON WATTS: And the member’s saying he knew that’s why I would do it. He is relatively psychic, and I acknowledge that. But the cost of $2.6 billion is a figure that cannot be overlooked. Over the last year, there has been a considerable amount of commentary, I think across the House, in regards to this bill, so what I’m saying comes as no surprise for those that have been watching this. But the issue around the fact of GST on food—and, in particular, fruit and vegetables, as was noted by the Labour Party—has also been covered extensively by the Labour Party’s Tax Working Group back in the day as well. So we know that this analysis has already been done. And not often does a National Party member refer much to the Labour Party’s Tax Working Group, but today is the day that maybe we will. And I will cover some of that.

So estimates within the work that was undertaken by the Tax Working Group indicated that the total value of this change could give an additional $53 to some of the most wealthy households per week as a result of this change, and about $14.50 for our lowest-income households. So let’s unpack that aspect. Let’s start with the first point, which is in regards to the Tax Working Group indicating that that spending and that amount of money would mean, in effect, a cash transfer of around $29 for every household per week; far more than the lowest income families would get from this policy that the member is representing. And I note for the House that these numbers are from 2018, before, obviously, a significant implication in regards to the inflation that has flown over the prior periods. But let’s take that aside.

The goal merely from this policy, as the member quite rightly indicated, is in order to maximise that transfer of money back to the back pocket of those with low income predominantly, and it is just simply not an efficient mechanism in order to do that. The claim that this is a progressive policy that will deliver most of its value to low-income households simply is not correct. It is not the reality. It is unavoidable because the nature of GST, as we know, is that GST is paid in terms of those that spend it, and it will benefit those who spend more on food than those that don’t. The truth is that this policy benefits a number of those people who were going to spend more on food and will not necessarily bring the benefits to those on lowest income.

It’s also based on the assumption that all of this benefit will be passed on to consumers. And we know from analysis in the debate, actually, that the Labour Party had in regards to a similar promise that they made leading into the election that the real question is how much of this GST reduction will actually flow through to consumers. It’s sadly the case that one of the biggest beneficiaries of this policy that the member is proposing will actually be the supermarkets chains themselves, not the low-income families. And that’s why we are not supporting this bill.

Rawiri Waititi: That’s rubbish.

Hon SIMON WATTS: And the member’s saying that’s absolutely rubbish. I can hear the member saying “rubbish”. It’s not rubbish—it’s not rubbish. It is facts—it is facts. And I’m running it down the middle there for the member, and I’ll pass it to the member as well.

But we’ll keep going because we’ve got five minutes to go and I’m enjoying this opportunity to do a little bit more talking on GST, which is a great topic to be talking about as we lead into the main event at 5.30 p.m., in only 14 minutes. And I can feel the crowd building, not only for this GST speech, but for the main event.

So let’s get back to the topic. The other issue with this is that the more exemptions that you place in terms of GST, the more complexity there is that comes into the system. And New Zealand has a very good system in regards to GST, unlike our cousins across the Tasman, in Australia, who have exemptions for everything. In New Zealand, actually, we have a very simplistic model and very few exemptions.

Rawiri Waititi: We follow them into war. We don’t follow them in the example of no GST on food.

Hon SIMON WATTS: And I’m loving the participation of the member in terms of the commentary that I’m providing, but the reality is, as it stands, our system has very few exemptions, meaning that the flat rate of GST that flows through on most goods and services means that it is a system that is easy to apply and it is easy to predict, and that’s important as well. For businesses, it makes it easy for them to do what they need to do. And if we apply what the member’s proposing, that’s going to make it more complex, and that is not the outcome we want.

I obviously congratulate the member for putting this bill in. It’s a little bit simpler than what the Labour Party were proposing prior to the election, so I acknowledge the work and effort that’s gone into the simplification of that. But that’s pretty much where I’ll draw the line—it’s where I’ll draw the line—in terms of that, because there’s a lot of complexity that comes in between fruit and vegetables and other food items, and the problem is, as we know in these types of conversations, the devil’s always in the detail, isn’t it? The devil’s always in the detail. And when we start getting into the definition of food, that’s when the complexities are going to arise, and we can’t have any of that.

We’re a Government of simplicity and we want efficiency in regards to that, so we’re not going to be up for that. And we don’t believe that this is going to do what we need to do. So don’t worry about that. We think that GST should apply flatly across all goods and services, and I think that is the most appropriate way that we want to do that.

In regards to other aspects of this, we think that in the points that I’ve raise that it will apply to any of the changes, and we need to also think about the broader context around this bill. We’re also aware that this will make our system more complex, and we have noted that pretty clearly.

So, look, I’m not going to continue on too much longer. I know we’ve got a little bit more time to kill this evening before 5.30 p.m., but National will not be—

ASSISTANT SPEAKER (Maureen Pugh): I’m sorry to interrupt the member, and I do welcome all our visitors to the gallery and thank you for being here. But the House needs to continue its business until the valedictory that you’re here for. And I just respectfully ask that you do it in silence. Thank you.

Hon SIMON WATTS: Thank you, Madam Speaker. I’m sure they were no doubt wanting to listen to the conclusion of this GST speech before that. But National, sadly, will not be supporting this bill. Instead, we will be focusing on more policies of substance that will lower the cost of living for hard-working Kiwis across this country like focusing the Reserve Bank on a single mandate, or maybe removing the Auckland fuel tax could be a good option that we might do, or delivering real tax reductions for hard-working Kiwi families. And we’ll be talking about more of that soon, for the member as well.

So when it comes to tax, we’ll be focusing on making the system much more straightforward, much more simple, rather than making it more complicated. On that basis, sadly, I will not be commending this bill to the House.

Thank you, Madam Speaker. I rise to take a call on this member’s bill, the Goods and Services Tax (Removing GST from Food) Amendment Bill, in the name of Rawiri Waititi, and I want to acknowledge the brother and thank him for coming to the House with an actual initiative to address the cost of living.

The reason why I want to thank you is because on the other side of the House we have seen over the last hundred days, policies that have done nothing—nothing—to improve the cost of living for everyday Kiwis. In the House today, when the new co-leader of the Green Party, Chlöe Swarbrick, asked the Prime Minister to name one cost of living policy they’ve implemented in the last hundred days to bring down the cost of living, the answer was the Auckland regional fuel tax. And then when the member for Auckland Central continued to ask the Prime Minister “By how much, what is the cost now?”—

Rawiri Waititi: Rhubarb, rhubarb, rhubarb.

Hon BARBARA EDMONDS: Rhubarb, rhubarb, rhubarb. What we have seen from the other side of the House to address the cost of living has been cuts to benefits, and the removal of the Māori Health Authority, which was there to help with the health and wellbeing of Māori people who are at the very bottom of our health statistics. What we have seen is a commitment to removing public transport fees at half-price and removing it so it’s no longer free from July. These are costs that are on everyday Kiwis and everyday families.

But this Government, who says they’ve got a laser-like focus on the cost of living, instead decides to put $2.9 billion towards tax breaks for landlords. And then on the other hand, what they do is they say sorry to the disability community, sorry to all those hard-working parents who have to work 24/7 to look after their disabled child, but there’s not enough money in this pit for you. And yet $2.9 billion has been committed to tax breaks for landlords.

That is what we’re seeing on the other side of the House to address the cost of living—and a member across the House has asked me what this has got to do with the bill. It’s very clear the purpose of the bill is to deal with the cost of living. But, you know, I will give the member some latitude because they are a new member in the House.

I want to take a very quick moment to acknowledge what’s going to be happening at 5.30 p.m. today, and that is that this House will be farewelling the Hon Grant Robertson. It’s always intimidating to speak in this House, even more so when surrounded by former members of Parliament—who will probably grade me after this—like the Hon Kris Faafoi, who was the mighty member for Mana. When he left one door, he left the door open for me to walk into. Then when it came to the Hon Grant Robertson, when he decided to leave the door, he opened it for me. So I’m indulging the House’s time to be able to provide that small acknowledgment of the contribution that the Hon Grant Robertson has done for this country.

Coming back to the bill, purpose and values is why this side of the House walks through those doors every single day. If you have no purpose or values, you are in the wrong job. This side of the House is absolutely committed to helping those who are most vulnerable, providing support where we can to advocate for those carers because of the actions of the other side of the House, because of the ministerial decision to tighten up their application for respite care funding. So this side of the House will have more time to speak as to our view in relation to this bill, but I do want to finish by ensuring that we acknowledge the contribution that the Hon Grant Robertson has made for us, through the Working for Families changes, the Best Start payment, and the winter energy payment.

E te Māngai, tēnā koe. Tēnā koutou e te Whare. I wish this was the audience that we had for every single tax debate. As Rawiri Waititi, the co-leader of Te Pāti Māori, has just outlined, we have a fundamental problem in this country when it comes to the way that our tax system presently operates. That is, as he was alluding to, that report from the Inland Revenue Department with subsidiary papers from Treasury, released at the beginning of last year, which showed us—which showed this House and the whole of the country—that we have a tax system that sees the top 311 families pay an effective tax rate less than half of that of the average New Zealander. That’s not an accident but a consequence of the way that our tax system has been designed.

So let’s get into the content of this legislation. Firstly, I just want to commend our colleagues and our friends in Te Pāti Māori, for, as the Hon Barbara Edmonds said, bringing a bill to this House which does speak to values, and also for the luck of the draw in having it put forward to us in the House today.

The call to action from Rawiri Waititi was asking this House whether we had the guts to do what was necessary to eliminate poverty. That’s where I’m afraid I must be up front and straight up with Rawiri Waititi and our friends in Te Pāti Māori. I called him and said this earlier today, that we in the Greens could not support this legislation because, unfortunately, it will not do what it says on the tin.

Hon Member: Oh, you agree with us.

CHLÖE SWARBRICK: So let’s get into precisely that. It is fundamental Green Party policy, and one that we’ve said multiple times throughout the campaign, Carl. So the question is: what does this bill do? The proposition that we’ve had is that this bill will eliminate poverty. Unfortunately, it won’t do that.

The reasons for that are manifold. The first is that we know that there is nothing that will stop the supermarket duopoly from filling the gap. We have seen similar moves from corporates when we’ve seen targeted taxes removed à la the regional fuel tax. We know this because it’s reflected in the Tax Working Group’s report, which the Minister of Revenue alluded to just before.

We also know, as a result of that independent advice, that a policy like this, unfortunately, will disproportionately benefit the wealthy, who will buy more of those goods at the supermarket. We also know that it comes with an approximate $3 billion price tag, and, therefore, the proposition from the Greens is that that money can be better spent elsewhere. If, indeed, our priority is to eliminate poverty, we can do that through the likes of what we campaigned on in the Greens—our evidence-based policy to tax wealth and pay for a guaranteed minimum income to eliminate poverty. We also know that there is immense complexity in administration of a policy like this. We’ve seen that reflected in Australia where they have a similar policy.

I just want to call out the Minister of Revenue, the Hon Simon Watts, who previously was speaking to some of these points in the Tax Working Group report, because he loves to cherry-pick the fact that the Tax Working Group went through this policy and said that it wouldn’t work and it wouldn’t do what it said on the tin, but what he doesn’t want to put the microscope on is the fact that the Tax Working Group recommended a comprehensive capital gains tax, which would have gone some way to fixing our tax system and some of those fundamental inequities that I opened my speech with.

I also want to say thank you to our colleagues and friends in Te Pāti Māori for expanding the tax debate from the austerity, trickle-down nonsense that we have heard thus far from the three-headed taniwha that is this coalition Government.

So, in summation, let me be very clear: the Green Party of Aotearoa New Zealand wants to eliminate poverty—those are our values. We will follow the evidence to see that happen, as is reflected in our policies for a wealth tax and for a guaranteed minimum income, least of all and also helping to fund our public infrastructure that we know is in colossal—hundreds of billions of dollars of deficit, because successive Governments have preferred to stick their heads in the sand than fix our tax system.

Ultimately, I might add, that comes at the cost of our productivity. I put these questions once again to Treasury when they were in front of us at Finance and Expenditure Committee the week before last. The point that they have consistently made is that a lack of a capital gains tax pushes up house prices and robs us of that productivity.

So, in conclusion, the values behind this bill are correct, but the evidence shows it will not do what the member says it will, and we look forward to working with them to see more evidence-based policy implemented. Thank you.

Debate interrupted.