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Australian farmers have joined health groups in opposing suggestions to apply GST to the sale of fresh food.
The National Farmers’ Federation (NFF) chief executive Simon Talbot believes the GST exemption for fresh foods should be retained. He says a suggestion by Liberal backbencher Dan Tehan to extend GST to fresh food will harm farmers and families.
Whereas most processed food is subject to GST, fresh fruit and vegetables, meat, eggs, bread some dairy products and other basic items were exempt under a 2000 deal between the John Howard government and the Australian Democrats.
The cash-strapped Federal Government would raise an extra A$6bn a year from GST on fresh food.
Talbot says no one understands better than farmers the importance of fresh food.
“The NFF understands budget pressure. But we also understand the reality of family budgets. We want Australians to eat more fresh food, not less. Increasing the cost of food could mean consumers demand less fresh fruit, vegetables and protein, leading to a decrease in overall sales and poorer health.
“Retailers aren’t going to forego profit, so farmers are likely to be forced to absorb the increase in costs. They are not able to pass on their costs.
“Unhealthy eating is the greatest factor affecting [health] in Australia. Obesity, diabetes and nutritional deficiencies are increasing problems, and they are costly. It makes no sense to increase the cost of fresh food.”
Health groups in Australia are also rejecting GST on fresh food, warning such a change would worsen already alarming rates of obesity and chronic disease.
Prime Minister Tony Abbott, whose first-term government is trailing in opinion polls, says there will be no changes to the GST this term. “I don’t mind people debating the GST and MPs discussing it, but the GST can’t change unless all states and territories agree and there is a political consensus in the Parliament.”
The tax will be looked at as part of the government’s taxation white paper, due to be launched this month.
Arguing his case to extend GST, Tehan said the Abbott government should begin the new year “by broadening the GST” to cover exempted items such as fresh food, health and education.
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