Explainer: What foods would be cheaper under Labour's GST policy?

The worst-kept secret in New Zealand politics is out - if Labour is re-elected, it would take GST off fruit and vegetables.

But the policy has been criticised in the past - including by Labour's own finance spokesman Grant Robertson - for being hard to implement, as it's difficult to define which foods are in or out.

For example, a juice might be made entirely of fruit. Crystallised ginger might settle the tummy, but it might be difficult to settle on whether that counts as a vegetable exempt from GST.

But the policy has the potential to be a vote winner, with the cost of food soaring in the last couple of years. In May, the cost of fruit and vege was up almost 20% on the same time the year before.

Labour's policy has set out (mostly) how it will define fruit and vegetables which meet the criteria to be exempt from GST.

It will apply to fresh and frozen fruit and vegetables, but not to anything "processed".

A bag of frozen peas would be GST exempt, as long as there are no other (non-fruit or vegetable) ingredients included. (Source: istock.com)

For the purpose of the policy, Labour defines "processed" as "anything cooked or combined with other ingredients".

So forget about a 15% saving on dried apricots, pineapple juice or canned corn, but an apricot, pineapple or corn on the cob will have a lower price tag.

A bag of spinach would be cheaper too, as would a bag of frozen peas, as long as there are no other (non-fruit or vegetable) ingredients in the bag.

Items canned, juiced or dried count as processed under the policy.

And Prime Minister "Chippy" says no to chippies - "potato mashed into chips, coated in canola oil and then frozen would be excluded and would still attract GST", the policy document said.

It's not all sorted yet however - Labour will further refine the finer points of what's in and out with a working group.

Sun, Aug 13

4:51

But broadly - if it's a fruit or vegetable and it isn't canned or dried, you could be in for a 15% saving from April 1 2024.

If Labour is re-elected to Government that is - the policy is an election promise, not a Government announcement.