pn881. The Case for Removing GST on Food

 

Taxes on unhealthy food and their removal on all "good" food are common worldwide. In Australia fruit and vegetables are exempt from the 10% Goods and Services Tax (GST). 

There have been moves to reduce or remove GST on food in NZ for a number of years but nothing has eventuated so far.

  A petition to Parliament signed by 40,000 people in 2011 got nowhere, and neither did parliamentary bills in 2010 and 2011. 

Yet there's a strong argument that the removal of GST on all food (or at least on fruit and vegetables)  makes a lot of sense.  It is the surest way to assist poor households which spend a large proportion of their incomes on food, and their improved diets would have healthy outcomes for adults and their children. It would be a direct assault on child poverty.  It does not favour the rich which tax cuts favoured by National and Act would.  And it would be relatively easy for supermarkets to operate.  The Australians use barcodes and integrated software package that makes compliance costs negligible.

Labour once flirted with the idea and currently has all sorts of other ideas to bring down the cost of living, including the Commerce Commission's proposed new regulatory steps on supermarkets which it hopes will see fairer pricing.  The Greens propose several measures to encourage eating healthy food but they appear to have no policy on food and GST. Only rhe Māori Party want GST abolished.  On all food.

Gordon Campbell is helping to keep the topic alive in this recent article, "Removing food GST would be fruitful." See also Martyn Bradbury in pn879.

What do you think?  Please comment on this posting.