National's finance spokesperson has promised on AM her party's tax policy will leave an average Kiwi household "much better off" than they ever would be under Labour.
It comes after Labour leader Chris Hipkins on Sunday confirmed the party would run at the election with a tax policy that included removing the goods and services tax (GST) from fresh and frozen fruit and vegetables.
The GST policy, if Labour is elected, would save an average household about $4.25 per week from April 1 next year.
But criticism has quickly poured in with National saying Kiwis wouldn't be able to afford a kumara with the savings.
National's finance spokesperson and deputy leader Nicola Willis told AM on Monday Kiwis wouldn't see the full $4.25 from Labour's savings.
She told AM co-host Ryan Bridge some of the savings would go to middlemen, so will reduce the amount Kiwis get.
"There's just no way that full benefit will go to shoppers because it's got to pass through middlemen whether it's the shop owner or the supermarket. When this has been tried in other countries it doesn't all get passed on," she said.
"You've heard Labour pooh-poohing tax experts, well, I remember when they pooh-poohed the experts on KiwiBuild, remember? Everyone said 'Look, that won't work Labour' and they said 'No, no, it's going to be fantastic. There are going to be 100,000 houses, just ignore the experts'. Well, that didn't deliver and this wouldn't either."
But Labour says the new Grocery Commissioner will be able to check retailers actually pass on the removal of GST from the products to consumers.
"The Commissioner has powers under the Grocery Industry Competition Act 2023 to require information and reports from supermarkets on matters such as their prices and margins," a Labour policy document says.
"They can also proactively issue guidelines laying out their expectations. The Grocery Commissioner will receive and investigate complaints. We will ensure they are able to get under the hood and report publicly to ensure benefits are passed on by supermarkets."
Bridge questioned Willis about National's tax plans, saying a person earning $45,000 a year would only get an extra $2 a week based on what National has announced so far.
"That's not even half a packet of chocolate scotch fingers on sale," Bridge said.
A packet of chocolate scotch fingers is selling for about $3 at Countdown.
But Willis hit back, saying that was only part of National's tax policies.
National announced last year, if elected, it would adjust tax brackets to account for inflation between 2017 and 2021.
She promised on AM that National's full tax policy would leave Kiwis better off than they would under Labour.
"What I can confirm for you is that your average household is going to be much better off under National," Willis said.
She said Nartional's tax policy would be better than not only the $4.25 in savings Labour is offering by cutting GST from fresh and frozen fruit and vegetables but also the savings given to families with children.
Labour also announced on Sunday it would increase the amount given to families with children by $25 per week to $97.50 per week. Overall, about 175,000 households would be about $47 per week better off under Labour's policy once abatement thresholds for Working for Families were lifted in 2026.
"It'll [the policy] 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," she said.
"Bear in mind the Working for Families changes announced yesterday [Sunday] will benefit fewer than one in ten households and half the cash that's on offer won't come until the next election year in 2026.
"So I think that's a pretty miserly offering and we're going to do better because we know New Zealanders are really suffering, whether it's rents, mortgage, groceries, petrol, they need some relief and we are prepared to make the savings needed to deliver it to them"
"It's frustrating"
A tax expert has been left confused after Labour's new tax policy to remove GST from fresh and frozen fruit and vegetables went against expert advice.
Tax consultant Terry Baucher said it can be frustrating when politics gets in the way of what's best for Kiwi households.
"Tax is politics and that's something we have to live with. It's frustrating perhaps as an expert, but you just keep giving the best advice to your clients and whoever asks for it," he told AM on Monday.
When asked who would benefit from Labour's tax policy the most, he told AM the poor would.
"The tax working group when it looked at this in 2018/2019, noted the highest proportion of spending on food and vegetables is at the lower end of the scale, deciles 1 to 4," he said.
"Proportionally, they spend more on that so they will be the ones who get the most benefit from it. In absolute terms, wealthier people because they spend more will get the benefit in dollar terms."
Watch the full interview with Nicola Willis and Terry Baucher in the video above.
