13 Jul 2010

Parliament urged to drop GST on healthy food

11:52 pm on 13 July 2010

Nutrition experts want Parliament to drop GST from foods such as fruit and vegetables, bread, milk and lean meats.

Parliament is due next week to consider a Maori Party bill titled the Goods and Services Tax (Exemption of Healthy Food) Amendment Bill, which proposes scrapping GST on healthy foods.

Maori Party MP Rahui Katene hopes to persuade other parties to support the Bill.

But a Radio New Zealand political reporter says the Bill will not pass its first reading because National will vote against it.

Canterbury public health nutritionist Bronwen King says New Zealand should emulate Australia's policy of not charging GST on basic foods.

The head of public health at Otago University's Wellington school of Medicine, Professor Tony Blakely, says the benefits of removing GST from healthy foods would eventually outweigh the costs, Waatea News reports.

Professor Blakely was one of a panel of experts brought together by the Science Media Centre on Tuesday morning to discuss the proposed Bill.

He says health improvements will come from the combined actions of government, communities, whanau and individuals.

Foods that would be exempted from GST under Mrs Katene's bill include fruit and vegetables, breads and cereals, milk products, lean meat, poultry, and seafood.

Labour supports move

Labour leader Phil Goff says the party is finalising its study on the cost implications of scrapping GST on some foods, both for its health benefits and to help families struggling with their bills.

"Labour is very positively inclined towards removal of GST from fresh fruit and vegetables."

Mrs Katene says she has her fingers crossed that the ministers of finance and revenue can be convinced the food exemption is a good idea, and that her Bill should go to a select committee for further debate.

However United Future's Peter Dunne, who is Revenue Minister, also plans to vote against the Bill.

He says removing GST from healthy foods would be unworkable because it would lead to a cascade of calls for other items to be removed.

"What about things like sandwiches bread rolls ... the whole thing is a nonsense, it's populist drivel really.

"I think the focus should be on making sure people have adequate incomes, that's what the tax changes were all about, particularly for people at the lower end of the income scale."