Debate about GST on fresh food ignites

Posted by AFN Staff Writers on 6th January 2015
Debate about GST on fresh food ignites
Debate about GST on fresh food ignites

Recent suggestions from the Australian Federal Government that the Goods and Services Tax (GST) be applied to the sale of fresh food has sparked concern from both farmers’ groups and the Federal Opposition.

Liberal backbencher, Dan Tehan, has suggested minimal exemptions for the GST, arguing that broadening the tax would mean up to $21.6 billion in extra revenue each year. Fresh food and health and education services are currently exempt from the GST.

Acting Federal Opposition leader Tony Burke has criticised the suggestion that the GST be broadened to include fresh food, saying that such changes would mean the GST would be applied to the “fundamentals and essentials of life”.

The National Farmers’ Federation (NFF) has also raised serious concern over the suggestions to apply the Goods and Services Tax to the sale of fresh food.

NFF CEO Simon Talbot said he believed the GST exemption for fresh foods should be retained, saying the move would have a negative impact on the welfare of Australian farmers and Australian families.

“No-one understands better than farmers the importance of fresh food,” Mr Talbot said. “The NFF understands budget pressure. But we also understand the reality of family budgets,” he said.

Mr Talbot said increasing the cost of fresh food “could mean consumers demand less fresh fruit, vegetables and protein, leading to a decrease in overall sales and poorer health outcomes”.

“The reality is that the retailers aren’t going to forego profit,” Mr Talbot said. “This means that farmers are likely to be forced to absorb the increase in costs. They are not able to pass on their costs,” he said.

Mr Talbot said that unhealthy eating was “the greatest factor affecting the burden of disease in Australia” and that it made “no sense to increase the cost of fresh food”.

“After all, Australians need greater incentives to eat healthily, not disincentives,” Mr Talbot said.