Increasing the GST to 15 per cent and extending it to health services and fresh food would slug Australians $15 billion a year and could drive people to eat more junk food, Labor warns.
Opposition health spokeswoman Catherine King says raising and extending the consumption tax to fresh food would deliver a “disastrous blow” of more than $9 billion a year.
A 15 per cent GST charge on health would cost sick Australians more than $5 billion a year, she says.
The calculations are based on Treasury figures that show the government would have gained an added $3.5 billion in revenue in 2014-15 if the existing 10 per cent GST had been applied to health.
“With around one million Australians already living with diabetes, a $9.6 billion-a-year hit on healthier foods would make junk food even more attractive, worsening health outcomes and adding to health costs,” Ms King said.
It comes after the Parliamentary Budget Office, at the request of Nationals MP David Gillespie, found raising the GST to 15 per cent and extending it to more goods and services would generate an extra $65.6 billion, for a total take of more than $130 billion, in 2017-18.
Treasurer Scott Morrison has not specifically backed calls for the New Zealand-style GST but says everything is on the table.
The Australian Medical Association has called on Prime Minister Malcolm Turnbull to rule out extending the GST to health services, saying it would penalise the country’s poorest and sickest.
The Rural Doctors Association of Australia has warned the move would encourage rural and remote patients to delay visits to the doctor and present at hospital emergency departments instead, placing a bigger burden on the health budget.