Norman Russel William: Goods and Services Tax (Exemption of Healthy Food) Amendment Bill — First Reading 
Norman Russel William: Goods and Services Tax (Exemption of Healthy Food) Amendment Bill — First Reading 
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Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 The Green Party will support the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill’s referral to a select committee. We think that it is an important bill and we want to hear the arguments on it. We want to have the debate in select committee on this bill. We think the intent of the bill to encourage people especially poorer families to eat healthier food is an extremely important intent. Moreover we think that the aim to reduce the price of food particularly healthy food is certainly noble and would make it easier for poorer families to afford healthy food. We also know that if we can get people eating better healthier food there are cascading benefits to the health of the individuals and to the cost of the health system itself. New Zealand has an obesity epidemic. It is one of the greatest problems facing the New Zealand health system and New Zealand health in general. The obesity epidemic is a slow-moving health catastrophe and the cost and treatment of diabetes will swamp the health system if we do not do something about it. 
One of the key drivers of the high cost of fruit and vegetables is the supermarket duopoly in New Zealand. One of the ways to address the high cost is to tackle the exorbitant mark-ups that supermarkets put on fruit and vegetables. Earlier this year my colleague Sue Kedgley surveyed fruit and vegetable growers in New Zealand and the growers reported that supermarkets or rather the two supermarket chains that dominate 95 percent of the retail trade in New Zealand routinely put mark-ups of 100 percent to 200 percent—and sometimes as high as 500 percent—on fruit and vegetables. So a grower will sell a kilo of lemons for 70c and the supermarket will charge $3.99 for them which is a mark-up of more than 500 percent. These mark-ups are excessive and frankly obscene. They are putting fruit and vegetables out of the reach of ordinary New Zealanders whereas it is fresh fruit and vegetables that we absolutely need ordinary New Zealanders to consume more of. That is one of the key issues this bill is trying to address. The bill is trying to get people to purchase more fresh fruit and vegetables and obviously GST is one issue but there are some other issues as well. These mark-ups that supermarkets are putting on fruit and vegetables are influencing the eating habits of New Zealand and discouraging us from buying them by making them too expensive. So dealing with supermarkets is one effective way to counter that and I encourage members to support the development of a supermarket code of practice similar to the one in the United Kingdom. My colleague Sue Kedgley has a private member’s bill to do that. We are supporting this bill because it is one way to address the high price of fruit and vegetables. 
Beyond the issue of the supermarket duopoly which drives up prices there is the further question of whether a cut in GST would be passed on to consumers. There are absolutely no guarantees that a cut in GST on fruit and vegetables would be passed on to consumers. It is of course a function of the duopoly that supermarket chains have an enormous leeway for setting their prices for fruit and vegetables. So in the select committee process which I am disappointed National does not want to engage in we can have the discussion about what is the best way to ensure that any cuts in GST would be passed on to consumers. National members have quite reasonably raised the issue of their concern as to whether cutting GST would result in that saving being passed on but they do not want to take evidence and have the debate about it in select committee. 
Supermarkets also have a complex set of internal price trade-offs so they discount one line in order to get consumers in. The question is how much of the cut would be passed on. The other concern about this bill is the compliance costs particular for small business. We know that supermarkets will have a system to make it easy for them to sort out what is GST-free and what is not. But for smaller businesses this can be quite a significant issue. So we would hope that in select committee we would look at that. The other issue is the reduction in Government revenue. A cut in GST involves a cut in Government revenue so the question that would need to be debated is whether this is the most effective use of that forgone Government revenue. That is the debate we would all very much like to have in select committee around this excellent bill. We can have that debate in the select committee only if the majority of the House passes this bill tonight. 
We certainly support this bill. There are very strong arguments for encouraging New Zealanders particularly poorer New Zealanders to eat fruit vegetables and other healthy food. We will certainly be supporting this bill’s referral to a select committee tonight.