By Boyd Champness
AUSTRALIAS peak cattle body fears beef consumption could fall in the wake of a 10% goods and services tax (GST) on hamburgers.
Cattle Council of Australia executive director Justin Toohey told The Weekly Times newspaper that it remains to be seen what effect the 10% tax would have on hamburger sales.
From July next year takeaway food and restaurant meals will attract a 10% tax, but staple foods such as meat, milk, bread, fruit, vegetables and eggs will remain GST-free.
“We have no idea yet how it will impact,” he told the paper. “Will consumers keep buying hamburgers even though they will cost 10% more, or will they buy tax free mince and make their own at home?”
Hamburger chains are major users of Australian beef. McDonalds, Hungry Jacks (Burger King) and other outlets use 450,000 tonnes of Australian beef every year.
Meanwhile, Australian Society of Certified Practising Accounts spokesman Angela Ryan told The Weekly Times that taxing some foods and not others would be an administrative nightmare.
“It is almost impossible to come up with any definition that will work in all cases,” she said.
The Federal Government – a coalition between the right-wing Liberals and the rural-based National Party – recently bowed to the Democrats demands and removed basic food from the GST package in return for the partys support in the Senate (Upper House) for its tax reforms.
Australian Food and Grocery Council executive director Mitch Hooke told the paper the big supermarkets would have to spend up to A$50 million (£20m) to adjust to the additional administration.
While Coles Myer Ltd – Australias largest retailer – last week claimed the GST compliance costs for supermarket retailers would be on par with the millennium bug project.
“We view (the GST compliance issue) as critical as Y2K was,” managing director of Coles supermarkets Alan Williams told the Stock and Land.
“My understanding from talking to industry people is that the actual cost of compliance will be equivalent to what Y2K compliance cost the industry.”