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Expansion of GST to fresh food to meet resistance from farmer groups

Calls from Western Australia Premier Colin Barnett, Treasury Secretary Martin Parkinson and a senior Coalition senator for a redistributed or higher/broader based goods and services tax (GST), have raised the possibility of the GST being expanded to fresh foods.

And Mr Parkinson, commenting about the Tax White Paper last week, talked about the issue of state governments raising insufficient revenue, while the share of household consumption expenditure subject to GST dropped from 61% to 56% in 2013.

Farmer’s groups such as the National Farmers Federation, Australian Dairy Farmers and NSW Farmers have recently voiced opposition to adding the GST to fresh food items that could lead to consumers making unhealthy choices in the supermarket.

Currently exempt from the 10% GST are fresh products such as fruit and vegetables, dairy products, meat and sugar.

Last week, Colin Barnett called for Canberra to address WA’s plummeting GST share, while in May, Queensland LNP Senator Ian Macdonald called for the GST to be extended to fresh food.
National Farmers Federation president Brent Findlay said he won’t support any policy that makes fresh food more expensive for consumers.

“We wouldn’t want to see an increase in the price of food while seeing less being paid back to the producers,” he said.

In July, the NSW Farmers Horticulture group opposed a GST on fresh food and said some sections of the wholesale/retail sector would pass the cost of the GST back to the weakest section of the supply chain, the producers.

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