Reference: 20260147
19 March 2026
Hayden.
[FYI request #33883 email]
Dear Hayden
Thank you for your request made under the Official Information Act, received on 27 February
2026. You requested:
Any analysis, model ing, or estimates held by Treasury of the fiscal cost of zero-rating
local y produced food for GST purposes — specifically, food sold directly by the
producer to consumers within the producer's district, with annual sales under $60,000.
Any analysis of the fiscal cost of a limited income tax exemption (the first $15,000 of
income) for natural persons deriving income from local producer direct sales.
Any analysis or briefing held by Treasury on the use of the tax system to address food
affordability in New Zealand — including any consideration of GST exemptions, zero-
rating, or targeted tax relief for food.
Treasury's current estimate of the total annual government expenditure on food-related
welfare and hardship assistance, including food grants, emergency food assistance,
and the component of benefit payments attributable to food costs.
Any cross-agency analysis of the relationship between food affordability, diet-related
health costs, and the fiscal impact of the grocery duopoly's pricing behaviour.
Any analysis of the net fiscal impact of enabling community food networks — taking
into account the potential reduction in food-related welfare expenditure, diet-related
health costs, and regional economic multiplier effects, against the fiscal cost of tax
concessions.
The estimated maximum fiscal cost of the proposed GST zero-rating and income tax
exemption is approximately $60 mil ion per year. The grocery duopoly earns an
estimated $365 million per year in excess profits.
The government spends an estimated $1.3 bil ion per year on food-related welfare and
an estimated $2 billion per year on diet-related health costs.
I am establishing whether Treasury has assessed whether a modest tax concession for
local food production would generate a net fiscal benefit through reduced welfare and
health spending.
If this analysis does not exist, thats a systemic gap: Treasury models the fiscal cost of
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tax relief but not the fiscal benefit of the intervention it enables.
If any information is to be withheld, please specify the grounds under the OIA for each
withheld item.
Partial transfer of your request
The Treasury does not hold information relating to the below parts of your request:
•
Treasury's current estimate of the total annual government expenditure on food-related
welfare and hardship assistance, including food grants, emergency food assistance,
and the component of benefit payments attributable to food costs.
•
Any analysis of the net fiscal impact of enabling community food networks — taking
into account the potential reduction in food-related welfare expenditure, diet-related
health costs, and regional economic multiplier effects, against the fiscal cost of tax
concessions.
I believe this information is held by the Ministry of Social Development. Accordingly, I have
decided under section 14(b)(i) of the Official Information Act to transfer this part of your
request to the Ministry of Social Development.
The Treasury believes that the below part of your request is more closely connected to the
functions of Inland Revenue:
•
Any analysis or briefing held by Treasury on the use of the tax system to address
food affordability in New Zealand — including any consideration of GST
exemptions, zero-rating, or targeted tax relief for food
Accordingly, I have decided under section 14(b)(i ) of the Official Information Act to transfer
this part of the request to Inland Revenue.
The Ministry of Social Development and Inland Revenue have 20 working days from receipt
of this transfer to make a decision on your request.
Information not held for remaining parts of your request
Unfortunately, the material addressing the remaining parts of your request does not exist.
New Zealand’s tax system general y follows a “broad-base, low rate” approach, to minimise
complexity and efficiency costs. We have therefore not considered targeted tax relief for local
food production, and this analysis has not been requested by Ministers.
I am therefore refusing your request under section 18(e) of the Official Information Act - the
document al eged to contain the information requested does not exist or cannot be found.
You have the right to seek an investigation and review by the Ombudsman of this decision.
Information about how to make a complaint is available at www.ombudsman.parliament.nz or
freephone 0800 802 602.
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Yours sincerely
James Haughton
Unit Manager, Revenue and Economic Development
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