Adding the Goods and Services Tax to fresh food items would lead to consumers making unhealthy choices in the supermarket, according to the National Farmers Federation.
A long list of things like dairy products, sugar, meat, fruit and vegetables are currently exempt from the 10 per cent tax.
But former Prime Minister John Howard, former Victorian Premier Jeff Kennett, the Henry Tax Review and Nobel Laureate Sir James Mirrlees have all at various times suggested that the GST should be
Economists, like Sir James Mirrlees, argue that when taxes are low, but broadly applied, the system is fairer, compliance is higher and the overall revenue raised is also higher.
The latest call to broaden the GST base comes from Queensland LNP Senator Ian Macdonald, a senior Coalition figure who sat on the frontbench during the period when the GST was being designed.
“We had a mandate to instigate a broad-based GST. Regrettably, to get it through the Senate, we fiddled with it,” he said.
“That made it very difficult for those who have to fill in the forms and divide up what had GST and what didn’t.
“And it also deprived the states of a substantial amount of revenue.”
National Farmers Federation president Brent Findlay says he won’t support any policy that makes fresh food more expensive for consumers.
“We wouldn’t want to see and increase in the price of food while seeing less being paid back to the producers.”
The president of Australian Dairy Farmers, Noel Campbell, says discussions about adding GST to fresh food is concerning.
“We think raising the price of fresh food would put producers in a position where they would look to other, less nutritious options.”
The Prime Minister, Tony Abbott, has dismissed Senator Macdonald’s call as ‘hypothetical’, saying Australians pay enough taxes already.