Should we remove GST on food?

No, it's complicated to differentiate between a $25 salad in a high street restaurant, versus the raw ingredients in a green grocer. The general rule is that the more expensive food you consume, the more GST you pay. The less expensive food you consume, the less you pay. Contrary to popular belief, unprocessed locally grown foods are still mostly cheaper (and more healthy) than imported and highly processed foods. Potatoes are cheaper than frozen or cooked chips. A few loaves of bread, and a bag of apples, will make healthier and cheaper kids lunches in comparison to the cost of pies and coke.

Another point is that if the government was too remove GST on food (a significant chunk of our economy), then it would immediately need to cut benefits and raise income tax to keep everything in balance, just as the same rule applies on GST increases. If we differentiated on healthy food, we would never hear the end of lobby groups attempting to get their foods on the healthy list, or "healthy options" from fast food outlets.

If you really want to avoid paying GST on food (and reduce food miles), then grow your own.

Posted: Wednesday 24 February 2010

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