Food and grocery sector welcomes Budget
20 May 2010
Food and grocery sector
The NZ Food and Grocery Council (FGC) welcomes today’s Budget announcements, says Chief Executive, Katherine Rich.
“Today’s Budget is a significant step forward in terms of realigning the economy in favour of our productive sectors, and creating a fairer tax system for all New Zealanders.”
“Changes to the GST system have a direct impact on the grocery sector, but these were signalled well in advance by the Government back in February. This has given the sector a head start in thinking about and preparing for the required changes.”
Mrs Rich says that the implementation date of 1 October 2010does allow our members time to make the necessary changes to information systems and prices.
“There is no doubt that the increase in GST will lead to higher grocery bills for shoppers. There is no escaping this fact. However, we are reassured by the accompanying income tax cuts which should compensate shoppers for the GST increase.”
Mrs Rich says the grocery sector thinks very carefully about price points and the impact of increasing prices on local consumers before raising any product prices.
“There will be significant pressure on prices over the next six months. The GST increase is just one factor, higher transport and electricity costs resulting from the emissions trading scheme are other factors, together with continual increases in prices for overseas sourced ingredients.”
“However, the sector can only withhold increases in their costs for so long before they have to be passed on to consumers. This is the reality of living in a market economy and again emphasises the need to grow incomes.”