When political party the Australian Democrats negotiated an exemption for “basic healthy foods” as part of the country’s introduction of a goods and services tax in 2000, they set in motion an often underappreciated measure to help keep healthy diets less expensive.
As US President Joe Biden calls for ideas to help end hunger and improve nutrition, there are simple tax options he could consider. Of the three relevant food price-manipulation strategies used by governments – subsidies on ‘healthy’ foods (e.g. agricultural and transport subsidies, retail price reductions or vouchers for high-risk groups); taxes on specific ‘unhealthy’ foods; and exemptions from GST or value added tax for ‘healthy’ foods – the latter is the least common. Several countries and some US states now have taxes on specific ‘unhealthy’ foods, most commonly sugar-sweetened beverages. But only Australia, Canada, Mexico, Ireland and the United Kingdom apply differential taxes according to the healthiness of broader groups of food.
In the face of escalating cost of living, climate change, and chronic disease, efforts to ensure nutritious, sustainable diets are available to all are more important than ever. Governments can use various strategies to manipulate food prices, but the exemption of healthy foods such as fruit vegetables, bread, fresh meat, fish, milk and eggs from a GST that is applied to all unhealthy, “discretionary” or ultra-processed foods and drinks both helps to avoid such taxes being regressive, and promote dietary choices that benefit people’s health.
