The Queensland Consumers Association says that participants in the current debate on whether to widen the scope of the GST should stop referring to the current exemption as applying only to fresh food.
Association spokesperson Ian Jarratt says, the current exemption applies to many more foods than just fresh foods.
According to the Australian Taxation Office (ATO), the exemption is for “basic food” which in addition to many (but not all) fresh foods, also includes a wide range of other foods including bread, cooking fats and oils, breakfast cereals, tea and coffee, jams, flour and cake mixes, and sugar, plus many canned or frozen products.
The Association says that for an informed debate on the scope and rate of the GST politicians and commentators should indicate very clearly the full extent of the current exemption, and consumers need to know that the exemption applies to more than just fresh foods.
The breadth of the current exemption for basic foods means that its removal would have a much greater impact on the cost of living than is implied, and people are likely to think, when the exemption is referred to as applying only to fresh foods.
Removal of the exemption would also result in less preparation of meals at home and significant changes in the consumption of various types of food, which are likely to have adverse public health impacts.
The ATO’s website says the following foods are currently GST-free:
- bread and bread rolls without a sweet coating (such as icing) or filling
- cooking ingredients, such as flour, sugar, pre-mixes and cake mixes
- fats and oils for cooking
- unflavoured milk, cream, cheese and eggs
- spices, sauces and condiments
- bottled drinking water
- fruit or vegetable juice (of at least 90% by volume of juice of fruit or vegetables)
- tea and coffee (unless ready-to-drink)
- baby food and infant formula
- all meats for human consumption (except prepared meals or savoury snacks)
- fruit, vegetables, fish and soup (fresh, frozen, dried, canned or packaged)
- spreads for bread (such as honey, jam and peanut butter)
- breakfast cereals.
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