Australian Food & Grocery Council

FOOD AND DRINK TAX PROPOSAL IGNORES IMPACT ON COSTS OF LIVING

A paper released today by the University of Melbourne calling for the taxation of fat, salt and sugar has essentially proposed a doubling of the GST on food, but failed to account for the impact it will have on Australians’ costs of living, said the Australian Food and Grocery Council (AFGC).

AFGC CEO, Mr Gary Dawson said the paper was a case of lobbying dressed up as analysis, which claims to be a “cost effectiveness” study but ignores many of the costs.

“We struggle to see the value of a study which is effectively advocating a doubling of the GST on food, but has openly acknowledged it has not accounted for the cost to business, and assumes away the costs to individual consumers and household budgets,” said Mr Dawson.

“Missing from this analysis is that a 10% tax on discretionary foods (the GST) has been applied to food in Australia for seventeen years and so the health benefits claimed in this study should already be proven. But this and similar taxes overseas have not reduced obesity rates.

“The Danish experimental fat tax for instance was a spectacular failure resulting in complex administrative burden costing over $27 million in administration costs alone, it damaged domestic producers and retailers which impacted on jobs and was eventually rescinded.”

“Obesity is a serious and complex public issue with no single cause or quick-fix solution. A raft of new taxes is not the way to make our nation healthier.

“Industry continues to support current government, community and industry programmes to educate people about the importance of a balanced diet and activity. The Australian Government’s recently announced Healthy Food Partnership is an agreement between government, industry and public health groups to cooperatively tackle obesity, encourage healthy eating and empower food manufacturers to make positive changes to their product portfolios.”

“Additionally industry’s uptake of the Health Star Rating scheme and greater information through extended labelling on ‘phone apps is enabling consumers to better understand what’s in food and what’s a healthier choice.”

“The introduction of five addition regressive taxes will impact those who can least afford it for little if any gain, and this study lacks any consideration of those on tight house hold budgets,” said Mr Dawson.

 

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AFGC Media Contact: James Mathews 0407 416 002