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Hipkins Completely Misunderstands His Own Party’s GST Costings

Chris Hipkins’ claim this morning that Labour’s costings for removal of GST off fruit and veg account for behavioural changes are completely untrue.

Responding to Mr Hipkins’ attacks on the Union, spokesman Jordan Williams said:

“We couldn’t care less what Mr Hipkins thinks about the country’s largest union, but to accuse us of getting it wrong when he fails to understand his own numbers stinks of desperation. The public deserve better.

“The Taxpayers’ Union last week highlighted that Labour’s costings for its flagship GST policy failed to account for any behavioural changes – the very same criticism Labour has made about National’s forecast Foreign Buyers Tax.

“If Labour is so confident that their modelling accounts for behavioural changes, the party needs to show us in its numbers because as it stands, we have managed to almost perfectly replicate Labour’s costings by calculating the cost of the policy without accounting for behavioural change. Mr Hipkins is either misleading the public or needs to release the spreadsheet.

“The point we made was that if the removal of GST is actually passed through to consumers, this will reduce the cost of fresh fruit and veg causing people to substitute their consumption away from GST-applicable products towards zero-rated fruit and veg as supported by academic research. This shift would significantly reduce the Government’s GST take.

“Of course Labour hates that we’ve pointed out the gaping fiscal hole in Grant Robertson’s fiscal plan. We’d much rather explanation or correction, than name calling.”

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