Maori MP wants GST taken off 'healthy' food

Wallets and waistlines would benefit if GST was removed from "healthy" food, says a Maori Party MP, who is planning to introduce a private member's Bill on the issue.

Te Tai Tonga MP Rahui Katene said while GST taxed people across the board, it was effectively a "tax on poor people", as struggling families spent a higher proportion of their income on food.

"A lot of people, particularly down South, are finding times tough . . . any little bit would help them out," she said.

While details of her Bill, expected to be introduced into the ballot in three weeks, had yet to be finalised, it was likely it would seek the removal of the 12.5% goods and services tax on fruit, vegetables, meat, fish, bread and dairy products.

Increasing tax on alcohol and cigarettes would be one way to compensate for the move, she said.

Only GST on "healthy food" would be removed.

Exemptions could include healthful meals from restaurants and cafes.

The proposed Bill was not just about people saving money, but also about saving lives, as it would encourage people to make healthier food options, she said.

Making quality food accessible, "particularly for Maori", who were over-represented in health statistics for obesity and diabetes, was imperative, she said.

According to Treasury figures, GST collected in the 11 months to the end of May was $10.5 billion.

Income from tobacco excise in the same period was $159 million and from alcohol excise $588 million.

The Maori Party, which campaigned before the last election for the removal of GST, was prompted to introduce a private member's Bill after suggestions GST be raised to 15%.

The working party reviewing the tax system said if GST was increased to 15%, government revenue would increase $2.1 billion.

Mrs Katene said if GST was removed from "healthy" food it would bring New Zealand into line with Australia and the United Kingdom, and if her Bill was selected from the ballot she hoped it would be a conscience vote in Parliament.

She rejected claims it would be too difficult to tax some food items and not others.

"Everything is done by computers. I don't think it would be that difficult".

However, a spokesman for Minister of Finance Bill English said the Government did not support exemptions.

The Government had set up a tax working group, led by Victoria University and including academics, private sector tax experts, Treasury and Inland Revenue officials, to look at whether the tax system can be improved.

The working group was expected to report back in December and the Government would then consider its recommendations, he said.

Social services agencies said they supported the GST move but questioned how it would be administered.

Otago Presbyterian Support chief executive Gillian Bremner said changes to GST had to be kept simple.

She would be concerned if the tax was increased to 15%.

"It is really important to think about the people who are struggling. If they raise the tax to 15%, then something has to be done."

Increasing the amount paid to beneficiaries was an option, she said.

Anglican Family Care Centre director Nicola Taylor said basic food items, such as dairy, meat and bread products, had "rocketed" in price in recent years, placing pressure on families.

While removing GST on healthful food was a "good idea", it would be difficult to administer, she said.

Salvation Army community ministries manager Captain Susan McGregor said there had been a 40% increase nationwide in the second quarter of this year in the number of food parcels handed out compared with the corresponding period last year.

"People just can't afford to buy the basics."

In June, food prices increased 2.8%, the largest monthly increase since a 3.8% increase in July 1989, when GST was increased from 10% to 12.5%.

hamish.mcneilly@odt.co.nz