Why we might soon be saying goodbye to cheap fresh fruit and veg….

Fresh fruit and veg may be about to get a whole lot more expensive… and it has nothing to do with farmers.

It has been revealed today by the Parliamentary Budget Office that if the GST is increased to 15 per cent and the GST exemptions on fresh food scrapped, it would raise more than $7 billion.

This is not good news for the people doing it the toughest in our country, particularly low income earners and pensioners.

The independent office has modelled a range of scenarios, from removing the GST-free status of basic food through to applying a 15 per cent tax to a much broader range of exempt categories.

It estimated that the changes could raise between $7.2 billion and $65.8 billion in 2017-18, before compensation is provided to the poorest 40 per cent of households.

“In the absence of compensation arrangements targeting lower income households, each of the scenarios analysed would have a greater relative impact on lower income earners,” the PBO report said.

According to the ABC, the analysis found for financial year 2017-18:

• Applying a 10 per cent GST to basic food would raise an extra $7.2 billion ($4.8 billion after compensation)
• Applying a 10 per cent GST to basic food, health, medical care, education, child care, water and sewerage would raise an extra $21.6 billion ($16 billion after compensation)
• Increasing the GST to 15 per cent without expanding the base would raise an extra $32.5 billion ($24.6 billion after compensation)
• Increasing the GST to 15 per cent and applying it to basic food would raise $42.7 billion ($31.4 billion after compensation)
• Increasing the GST to 15 per cent and applying it to basic food, health, medical care, education, child care, water and sewerage would raise an extra $65.8 billion ($49.3 billion after compensation).

It’s a hard pill to swallow considering we have been told that prices will stay low on our everyday needs. The GST increase is worrying many and speculation is still rife about when it will happen, not if it will.

Tell us, would a tax on fresh food have a big impact on your life? Do you think you’ll be properly compensated for the removal of the GST exemption?