Some calculations

The annual cost of Labour’s pledge to remove GST on fruit and vegetables is $515 million. Over four years that is $2.06 billion. You can do a lot with $2 billion. Now if all that $2 billion went into reduced prices, then that would be one thing. But Sir Michael Cullen’s Tax Working Group assessed […]

The post Some calculations first appeared on Kiwiblog.

The annual cost of Labour’s pledge to remove GST on fruit and vegetables is $515 million. Over four years that is $2.06 billion. You can do a lot with $2 billion. Now if all that $2 billion went into reduced prices, then that would be one thing. But Sir Michael Cullen’s Tax Working Group assessed that any such reduction of GST for food would only be passed on at 30%. This was based on actual empirical data from other countries.

So of that $2.06 billion in reduced revenue, $1.44 billion would go to supermarket chains.

The remaining $618 million would go to households.

That is $154 million per year that would go to households.

Per week that is about $3 million a week, for around 2.3 million households. That is $1.30 a week per household.

So the centrepiece of Labour’s plan to help with the cost of living crisis they are partially responsible for is to give $1.44 billion to owners of supermarkets and to give $1.30 a week to households.

The post Some calculations first appeared on Kiwiblog.