The ATO suggestion was revealed by The Age and The Sydney Morning Herald earlier this month, citing leaked ATO internal documents describing current GST applications to food as ‘confusing’ and varied depending on packaging, marketing, and consumption.
In a statement to FoodNavigator-Asia, an ATO spokesman said that the documents were not meant for release’ and that the media was not meant to have access to the ‘internal working brief’.
“The ATO routinely prepares a range of internal working briefs to consider administrative options, many of which do not progress to Treasury or to Government, and [this is one of those],” he said.
He emphasised that ‘the ATO’s role is to administer the tax and super systems, and not to advise on policy’, and that this brief was initiated to ‘consider options for an alternative way to identify foods that are exempt from GST’.
Despite the fact that the suggestion has not yet been formally made to the government, Morrison has already stated that this will not be taken up.
“The Government is focused on lowering taxes for Australians, and as the Prime Minister said last year we will not be making any changes to the GST,” said a spokesman to The Sydney Morning Herald.
Addressing the leak, Finance Minister Mathias Cormann also told The Australian that: “We are absolutely focused on delivering lower taxes to continue to build a stronger economy. We absolutely have no plans at all to broaden the base of the GST.
“I can absolutely rule out that particular proposition that was floated in some media outlets.”
Although Morrison previously considered multiple options for GST when he was treasurer, including broadening the range of applications to food, as Prime Minister he previously committed to ‘not touching’ it if re-elected.
"If you were to do something like that, you'd have to take it to an election. That's not what we're doing. [If] we wanted to do something like that, we'd take it to the Australian people and we don't plan to do that," he previously said to Sky News.
Contents of the ATO internal brief
According to The Age, the leaked brief was part of a ‘wish list’ the ATO intended to present to current Treasurer Josh Frydenberg, and was pushing for food items to be ‘automatically taxed unless specifically listed as GST-free’, an approach which is currently applied to beverages.
The ATO had argued that: “[Bringing] food into line with beverages would remove inconsistencies and improve clarity and certainty, particularly for small businesses.”
Inconsistencies highlighted included: The taxation of pre-prepared salads but not fresh fruits and vegetables, taxing brioche buns but not hamburger buns, and not taxing dried mixed fruits unless glace cherries are included in the mix.
