Applying the GST to fresh food would be an attack on poor families, who spend much of their food budget on foods that are currently exempt from GST, a health group says.
Public Health Association of Australia president Heather Yeatman on Wednesday highlighted Australian Bureau of Statistics data showing the households in the lowest 20 per cent of incomes spend the lowest proportion of their food budget on fast food and meals out, which attract GST.
“This means that not only will they be more affected by a change in the GST on basic foods because of their lower income, but also because it is where most of their food dollar is currently spent,” Professor Yeatman said
While most processed food is covered by the GST, fresh fruit and vegetables, meat, eggs, bread, some dairy products and other basic items were exempted from the tax under a 2000 deal between the Howard Government and the Australian Democrats.
However, government MPs including Trade Minister Andrew Robb and backbencher Dan Tehan last week called for the exemptions on basic food items to be reconsidered.
Professor Yeatman said since the GST was introduced in 2000, the cost of healthy foods such as fruit and vegetables had risen faster than less nutritious processed foods.
“We need incentives to eat health food – not disincentives,” Professor Yeatman said.
“Now is definitely not the time to be considering a GST on basic healthy foods. Diet-sensitive chronic disease
due to unhealthy eating is now the greatest factor affecting overall burden of disease in Australia, even
greater than tobacco. With funding already cut to many of our preventive health programs, it is not the time
to add further to the burden of disease. The GST exemption for healthy foods in Australia must be retained.”
The GST will be examined as part of the Abbott government’s taxation white paper, which is due to be launched this month.
However Prime Minister Tony Abbott has said there would be no changes to the GST in his government’s first term, and any change would require the agreement of states and territories as well as consensus in the federal parliament.