By Duncan Garner
Labour leader Phil Goff is suggesting his party may reverse the Government's planned GST increase in next week's budget – but only on basic food items.
The Prime Minister says Labour is confused about what it stands for and is at "sixes and sevens".
Labour's Phil Goff took his MPs on a tour of a brewery in Nelson – but he didn't touch a drop.
It's been a year of sobering poll results and on Wednesday he will attempt to get Labour on track with a policy speech.
The focus: the economy and the Government's planned GST increase to 15 percent.
He says a Labour Government may reverse the GST increase on basic food items like fruit and vegetables but keep it on fatty foods, like greasy takeaways.
"A lot of people have put forward a case sometimes on the basis of nutrition to say 'why not exempt, for example, fresh fruit and vegetables?' - that's something we'll look at," he says.
Mr Goff says reversing National's planned increase on daily grocery items needs to be considered seriously.
"In opposition, you're bound to look at all of the options, challenge your assumptions and then come out with a decision that is based on the pros and cons of arguments, one way or the other," he says.
Mr Goff's possible compromise is modelled on Australia – where fatty foods include GST – the fruit and vegies don't.
But John Key says it's a disastrous position.
"History shows you it is extremely difficult to take GST off food and to actually deliver a system that is not overly bureaucratic and, therefore, very expensive to run," he says.
In Australia, experts said the exemptions wrought havoc in the business community – compliance costs were up as business struggled to define what should be taxed and what shouldn't.
Mr Goff's Wednesday speech is also expected to outline changes in the party's monetary policy and on income tax.
The speech is important for Mr Goff – it's about showing Labour has moved on and is willing to change.
But Mr Goff's biggest problem is whether anyone is listening.
3 News