Removing the Australian tax exemption on healthy food adds food stress to families vulnerable to poor nutrition

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Abstract

Objective:

To assess the impact of changing the Australian Goods and Services Tax (GST) on household food stress, which occurs when >25% of disposable income needs to be spent on food.

Methods:

Weekly healthy meal plan costs for average-income (AI), low-income (LI) and welfare-dependent (WDI) families were calculated using the 2013 Western Australian (WA) Food Access and Costs Survey. Four GST scenarios were compared: 1) status quo; 2) increasing GST to 15%; 3) expanding base to include exempt foods at 10% GST; and 4) expanding base to include exempt foods and increasing the tax to 15%.

Results:

Single-parent families risk food stress regardless of their income or the GST scenario (requiring 24–42% of disposable income). The probability of food stress in Scenario 1 is 100% for WDI two-parent families and 36% for LI earners. In Scenarios 3 and 4, food stress probability is 60–72% for two-parent LI families and AI single-parent families, increasing to 88–94% if residing in very remote areas.

Conclusion:

There is food stress risk among single-parent, LI and WDI families, particularly those residing in very remote areas.

Implications for public health:

Expanding GST places an additional burden on people who are already vulnerable to poor nutrition and chronic disease due to their socioeconomic circumstances.

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