FED: Costello say no to food exemption as Dems seize on poll

AAP General News (Australia)
12-22-1998
FED: Costello say no to food exemption as Dems seize on poll

By Stephen Spencer

CANBERRA, Dec 22 AAP - Treasurer Peter Costello today ruled out exempting food from the GST
as the Australian Democrats seized on a new survey showing overwhelming opposition to a tax on
food to harden their position ahead of next year's Senate vote.

The Melbourne Institute survey found support for a GST had recovered to around 45 per cent,
close to the level of support it received when the government's tax package was released in
August.

However, opposition to a tax on food remained fairly solid at around 66 per cent.

Democrats Leader Meg Lees said the survey showed the government's arguments that food had
to be taxed had failed to convince voters and toughened her resolve to demand it be exempted.

"Very much so, and it certainly isn't surprising as Treasury itself well knows, we can take
the GST off food and get all the other benefits that a GST will give to us, and hopefully this
will get the government thinking again," Senator Lees told Radio National.

"Australians don't need lengthy surveys to tell them that those hardest hit by a tax on
food are going to be those at the very bottom."

A spokesman for Opposition Leader Kim Beazley said the survey made little difference to
Labor's stand on the tax.

"We don't support a GST on food, we don't support a GST on anything," the spokesman told
AAP.

"We will continue to oppose it lock, stock and barrel."

However, Treasurer Peter Costello today again made clear that while the government was
prepared to make some compromises to get the GST through the Senate, exempting food was not an
option.

"If they want to knock around stuff out of the GST, one it will knock around the
compensation, secondly it will knock around the costings," Mr Costello told the Herald Sun
newspaper.

"If you knock a huge whole in the tax package, blew its cost out by billions, you are going
to threaten the government's economic strategy, threaten interest rates, threaten growth - you
are going to threaten unemployment."

Mr Costello's stand was endorsed today by the Australian Society of Certified Practising
Accountants which branded the Melbourne Institute finding a "no brainer".

"If you ask most people if they support tax on a particular item, particularly one of the
necessities of life, it is fairly obvious what the result is going to be," CPA senior tax
counsel Paul Drum said in a statement.

"Calls for GST-free food often ignore the facts.

"Making food GST-free would create a veritable compliance nightmare for small business."

Mr Drum said the government should not create populist tax reform by dropping the GST on
food, but should instead consider increasing the compensation for low income earners to offset
the cost of the tax.

AAP ss/ms/de

KEYWORD: TAX NIGHTLEAD

1998 AAP Information Services Pty Limited (AAP) or its Licensors.