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18yr high justifies removing GST off basic food




18yr high justifies removing GST off basic food groups

15 July 08 | The Family Party is renewing calls to remove GST off basic food groups in the face of a food price increase of 8.2 percent for the year to June, which is the highest annual increase since June 1990.

Party leader Richard Lewis says many families are going without basic foods and the cost of depriving children of basic nutrition is going to have massive downstream health affects for New Zealand’s health system, which would far outweigh revenue not collected through GST on these items.

“While politicians romp around in their tax funded BMW’s, hire PR staff, fly here and there and dine out in Wellington, I hope they take a moment to consider the pain being felt in the real world by families that are struggling to put healthy food on the table for their children. A family friendly Government would tighten its own belt and stop over-taxing New Zealand families, particularly on necessities like fruit and vegetables,” says Mr Lewis. 

The Family Party released a policy in May to remove GST off basic food groups and fuel.

“Removing GST off basic food groups would provide instant relief at the checkout counter to all household income levels, including beneficiaries,” he added.

Price increase breakdown:

All five subgroups recorded upward contributions to the annual increase, with the most significant upward contribution coming from higher prices for the grocery food subgroup (up 12.1 percent). Within this subgroup, the main contributions came from higher prices for fresh milk (up 22.0 percent), cheddar cheese (up 61.9 percent), bread (up 15.2 percent), and butter (up 86.6 percent).

The remaining four subgroups recorded, in order of significance, the following upward contributions: restaurant meals and ready-to-eat food (up 5.5 percent), fruit and vegetables (up 8.7 percent), meat, poultry and fish (up 4.4 percent), and non-alcoholic beverages (up 4.9 percent).

Food prices increased 1.3 percent in the June 2008 month. The increase was mainly due to higher prices for the following subgroups: fruit and vegetables (up 5.2 percent), meat, poultry and fish (up 1.3 percent), and grocery food (up 0.4 percent).

Within the fruit and vegetables subgroup, the main contributor to the 5.2 percent increase were higher prices for fruit (up 9.7 percent). The increase was driven in particular by oranges (up 28.9 percent), apples (up 13.1 percent), and peaches (up 79.0 percent). Vegetable prices (up 2.6 percent) also made an upward contribution to this subgroup. The increase was driven by higher prices for lettuce (up 34.4 percent), which was partially offset by lower prices for tomatoes (down 18.8 percent).

The rise in prices for the meat, poultry and fish subgroup mainly came from higher prices for poultry (up 4.8 percent).




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