GST on fresh food would make Australia sick: Health groups

Health groups have rejected a call for the GST to be applied to fresh food, warning such a change would worsen already alarming rates of obesity and chronic disease.

Whereas 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.

Liberal backbencher Dan Tehan this week launched a debate about the future of the tax by arguing for reconsideration of the exemptions on food, as well as those on health and education.

"We must finish reforming our tax system by broadening the GST," Mr Tehan argued in The Australian Financial Review.

But Public Health Association of Australia chief executive Michael Moore said applying the GST to fresh food would be "short-sighted" because it would lead to higher rates of obesity, heart disease and cancer would place an additional burden on the health system.
 

What we know is that unhealthier foods are getting cheaper and the healthiest foods are already more expensive. Exacerbating that by putting a GST on food would just create much more expense in the long term," he said.

Jane Martin, the executive manager of the Obesity Policy Coalition said applying the GST to fresh food would be a "backward step" because it would undermine efforts to encourage healthy eating.

"Price signals are really critical to the decisions that people make," Ms Martin said..

"We need to encourage all people to eat more fresh fruit and vegetables but particularly those on low incomes."

National Heart Foundation chief executive Mary Barry said imposing a GST on fresh food would have a "huge effect" on the nation's health. She said that only one in 14 Australians ate enough fruit and vegetables, while one in four adults reported eating no vegetables regularly, and four in 10 did not regularly eat fruit.

"We're concerned that a GST on fresh food would prevent people from buying fresh food and send them off in other directions," Ms Barry said.

Instead, the government should consider a tax on sugar-sweetened beverages, which were a significant contributor to overweight and obesity, she said.

Researchers from the University of Queensland in 2013 estimated that applying the 10 per cent GST to fresh food would reduce fruit and vegetable consumption by about 5 per cent, and would produce an additional 90,000 cases of heart disease, stroke and cancer in the Australian adult population..

Speaking to reporters in the United Arab Emirates on Monday, Prime Minister Tony Abbott said there would be no changes to the GST in his government's first term.

"I don't mind people debating the GST and I certainly don't mind members of Parliament discussing the GST, but the GST simply can't change unless all of the states and territories agree and there is a political consensus in the Parliament," he said.

The tax will be looked at as part of the government's taxation white paper, which is due to be launched this month.
 

Source: Sydney Morning Herald , Australia, dated 06/01/2015