One Question Quiz


Aug 14 2023

Hipkins simmers at Baby-Beet inquisition

Lloyd Burr and his Baby-Beets. Photo: Toby Manhire

A boondoggleseque mood pervaded the second half of the prime minister’s post-cabinet press conference this afternoon as he defended the Labour Party’s centrepiece tax policy revealed yesterday: removing GST from fresh and frozen fruit and vegetables.

On the error in materials distributed to media that wrongly put the date of implementation in 2023, Hipkins disputed the National Party’s characterisation of a costings hole or an internal disagreement, saying, “the wrong data set was put into the factsheet. I acknowledged that, and it was fixed [but] it should have been proactively corrected.”

He was again unable to point to any economists who supported the initiative as a means to assist low income earners. Asked to what extent focus group research had informed the policy, he avoided the question, saying: “I said at the beginning of the year when I took on this job that I was going to be focused on practical cost of living measures.”

Newshub’s Lloyd Burr had come prepared with a bag of supermarket shopping, holding a series of grocery products aloft in a game of show-and-tell-me-whether-or-not this-would-be-GST-exempt-under-your-policy-prime-minister. By the time Burr brandished his Ready to Eat Pure’n’Ezy Baby-Beets, Hipkins was over it. “It depends how it was processed,” he said through gritted teeth, before leaving the room to an unacknowledged question about frozen stir-fry with grilled capsicum. 

Lloyd Burr and his Baby-Beets. Photo: Toby Manhire

Covid-19 isolation, mask requirements to end at midnight

A sign at a mall in Christchurch, 19 August 2021. (Photo: Adam Bradley/SOPA Images/LightRocket via Getty Images)

Our final remaining public health requirements relating to Covid-19 will drop at midnight tonight, effectively marking the formal end of the pandemic in New Zealand.

That means it will no longer be a legal requirement to remain in self-isolation for seven days should you test positive for the virus. It will also no longer be a requirement to wear a mask as a visitor to a health care facility.

Instead, people who contract the virus are encouraged, but not mandated, to stay at home for five days or until you feel well. Rapid antigen tests will remain free for everyone throughout 2023.

Health minister Ayesha Verrall said that overall Covid cases, wastewater levels and hospitalisations have been trending down since the start of June. And, she said, over the past month reported Covid-19 cases have hit their lowest levels since February 2022. Today’s Ministry of Health Covid update showed 5,372 cases reported over the past week, about 600 more than the week before.

“While our case numbers will continue to fluctuate, we have not seen the dramatic peaks that characterised COVID-19 rates last year,” Verrall said.

“Covid has put considerably less pressure on the health system this winter and other illnesses have been better planned for and managed. This, paired with the population’s immunity levels, means Cabinet and I am advised we’re positioned to safely remove the remaining Covid-19 requirements.”

Covid-19 accounted for 2.2% of hospital admissions this morning and New Zealand has now likely passed the winter influenza peak, Verrall added.

Image: Getty Images; additional design by Tina Tiller

Speaking at his post-cabinet press conference, prime minister Chris Hipkins acknowledged today’s significant milestone and said it was about three-and-a-half years ago that the country first moved into total lockdown: Covid-19 alert level four. “Closing the border, lockdowns… these things had an impact on peoples’ wellbeing. Auckland in particular did the heavy lifting, going through extended lockdowns to stop the spread of the virus.”

Managed isolation was “incredibly tough” for families and those working at facilities, but it “crucially gave New Zealanders an opportunity to get vaccinated.”

Hipkins said he now awaited the findings of the Royal Commission of Inquiry into the pandemic response.

Asked about those who may be concerned by the ending of restrictions, Hipkins said we had been transitioning “slowly and carefully” to managing Covid-19 as a “business as usual health system response”.

Verrall confirmed that no government vaccination mandates remained in place and pushed back strongly when it was suggested that a requirement to have a Covid vaccination for some Te Whatu Ora positions equated to a mandate. “‘Mandate’ has always been a legal mandate run by the government. For years, prior to Covid, there have been requirements for health care workers to be vaccinated against Hepatitis B and other conditions,” she said.

Reserve Bank poised to keep interest rates static

The government funds lots of accelerators, with the hope that it will create more successful businesses Illustration: Toby Morris

The Reserve Bank will on Wednesday reveal whether it’s making any changes to the official cash rate.

After months of steady increases, the central bank opted to keep the OCR static during its last update. And according to KiwiBank’s economists, that is likely to happen again this week.

“Our central bank will most likely keep the cash rate unchanged at 5.5%. But it’s all about the outlook, and the fresh set of forecasts. We expect to see some minor tweaks to the RBNZ’s forecasts. And it’s a watch, wait and worry approach,” said a statement today.

Any drop in the OCR isn’t likely to be seen until early next year, perhaps February, said KiwiBank. “That may prove to be too optimistic. But we are firm in our belief that rates should be marked lower in the first half of the year.”

Abandoned Waiwera hot pools being demolished

Waiwera Hot Pools today (Source: Derelict NZ Facebook)

The abandoned remains of Auckland’s Waiwera Hot Pools will be torn down.

As reported by Stuff today, demolition crews have started to clear the area, which was left derelict after a planned renovation in 2017 that never came to fruition. Only 45 minutes out of Auckland’s CBD, Waiwera’s new owners Urban Partners have decided to instead clear the land and sell it.

A 2021 feature on The Spinoff looked at the rise and fall of the once iconic water park. You can find that here.

Waiwera Hot Pools today (Source: Derelict NZ Facebook)

Fiscal hole claims ‘false’, says Labour

Chris Hipkins at the Labour tax policy launch (Photo: Toby Manhire)

The Labour Party has refuted suggestions there is a multimillion-dollar “hole” in its tax plan.

Earlier, National’s Nicola Willis claimed that Labour had under-costed its plan to remove GST from fruit and vegetables by about $240 million.

But a spokesperson for the governing party said that was “false”.

“The materials that were publicly released at the time of the announcement were all correct. The correct cost of the GST policy has always been accounted for in our fiscals and was discussed in the media conference yesterday,” the spokesperson said.

The alleged “hole” came from a fact sheet that had been distributed to media outlets under embargo ahead of the announcement, the spokesperson said, and was later updated.

$241 million ‘hole’ in Labour’s GST plan found

Grocery shopping can be used as a form of control. Photo: Getty

Labour’s admitted it made a mistake when costing its flagship election year policy to ditch GST on fruit and vegetables.

National’s finance spokesperson Nicola Willis has accused Labour of making a “schoolboy error”, noting that “Labour has failed to account for the fiscal impact of removing GST in the 2023/24 fiscal year, and has only partially accounted for the cost of the policy in the 2024/25 fiscal year”.

That’s because Labour promised to introduce the GST changes from April next year, but the financial year doesn’t begin for another three months, on July 1, meaning a portion of the policy had been uncosted.

“If the policy is introduced when promised, there will be a three-month hit to the books in the 2023/24 fiscal year, which ends in June. This is not accounted for in Labour’s policy,” Willis said.

“Labour has also made a mistake in their costing for the 2024/25 fiscal year. The annual cost of the policy should be approximately $500 million as in later years, but Labour has only budgeted $365 million. This is not explained.”

According to the Herald, Labour has corrected the mistake and said it was only included in the first version of the policy document, not the one that was sent out wider. However, on Twitter, Willis said that the incorrect figures ran on TVNZ’s news bulletin last night and “no effort has been made to correct them”.

“The error has now been updated on the website, so I presume Labour will have already alerted all media outlets that they led them astray yesterday,” she said.

National’s tax promise: You’ll be ‘much better off’ under us

National Party deputy leader Nicola Willis delivers a post budget address on May 20, 2022. (Photo: Phil Walter/Getty Images)

National hasn’t unveiled its full election year tax policy – but the MP in charge of it has already promised it will be beat Labour’s.

Nicola Willis, National’s finance spokesperson, appeared on Newshub’s AM this morning to rubbish Labour’s plan of ditching GST on fruit and vegetables. Not only would it result in just a small saving of about $4 each week, but Willis suggested some supermarkets wouldn’t even pass the full amount onto consumers.

However, National’s current tax plan to adjust thresholds in line with inflation, could see middle income earners even worse off. AM host Ryan Bridge claimed it would bring in just $2 a week in savings for those earning $45,000.

Willis said there was more to come. “We’ll be announcing our full policy very shortly. And what I can confirm for you is that the average household is going to much better off under National,” she said.

“It’ll make sure that Kiwis who are being smashed by the cost of living crisis get more out of us than they’ll ever get out of Labour.”

Asked about Labour’s proposed update to working for families, Willis said that would benefit fewer than one in 10 households – “and half the cash that’s on offer won’t come until the next election year in 2026. I think that’s a pretty miserly offering”.

white woman with dark hair next to NZ flags
National Party deputy leader Nicola Willis delivers a post budget address on May 20, 2022. (Photo: Phil Walter/Getty Images)

The Bulletin: A simple GST system made complex

What foods qualify? The government says the boundaries “will be based on whether the fruit or vegetable has been ‘processed’, meaning cooked or combined with other ingredients, explains Interest’s Dan Brunskill. “This rules out anything canned because of the heating process that accompanies canning.” Under these criteria, a prepared salad with croutons wouldn’t qualify, nor, presumably, would a frozen stir fry veggie mix with Chinese five-spice powder.

The government will set up a special “consultative expert group”, convened by the Inland Revenue Department, to adjudicate on tough cases, reports Stuff’s Malpass, but critics aren’t convinced it will be enough. “Removing GST from specific items, while seemingly benevolent, has far-reaching implications. It introduces administrative complexity, bordering on the absurd,” writes the NZ Initiative’s Oliver Hartwich for The Australian. “The definition of what is and is not taxed becomes a battleground, sucking up legal resources and fostering market inefficiencies.”

Want to read The Bulletin in full? Click here to subscribe and join over 38,000 New Zealanders who start each weekday with the biggest stories in politics, business, media and culture.

The three reasons why Robertson’s now on board with GST ‘boondoggle’

Prime minister Chris Hipkins and finance minister Grant Robertson

The finance minister has maintained that he’s changed his mind over the GST boondoggle, after Labour finally announced its election year tax plan yesterday.

The Spinoff’s Toby Manhire was at the policy launch and reported that alongside the removal of GST from fresh and frozen fruit and vegetables, Labour under Chris Hipkins would also increase the in-work tax credit by $25 a week and extend eligibility for Working for Families.

But while the policy of tampering with GST has clearly polled well with the public, the Labour Party faces the ongoing challenge of convincing critics that it’s a good move. One former critic was Grant Robertson himself. Of the policy he once blasted, he today told Newstalk ZB’s Mike Hosking that: “Like all good fresh fruit and vegetables, they go down well, they go down easily.”

There were three reasons that his position had changed, Robertson said. The first was the introduction of the grocery commissioner who would act as something of a watchdog. Then, there was seeing how GST exemptions had been implemented in other countries. And finally, it was the inclusion of frozen vegetables within the items. “I was worried that low income people wouldn’t get enough of the benefit,” Robertson said. I’m satisfied that can happen. We’ve worked through those concerns and I’m happy to be supporting the policy.”

Prime minister Chris Hipkins and finance minister Grant Robertson

Robertson said he stood by his record as finance minister and while he acknowledged that removing GST wasn’t going to generate a lot of extra cash in back pockets, it would make a difference. “New Zealand’s one of the few countries that doesn’t have these kinds of… exemptions within a GST or GST-equivalent system. We look over at Australia… and I don’t hear too many people say they’re going to leave Australia because they’ve got GST exemptions,” he said.

“I don’t think the purity of the tax system justifies not supporting New Zealanders with reducing the cost of food.”

Over on RNZ, Robertson couldn’t name a single economist or tax expert that backed the plan – instead, he said it was a policy for “the people who go to the supermarket and worry about whether they can afford what they’re putting together for their family”.