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Wednesday, 16 February 2000
Page: 11876

Senator O'BRIEN (2:49 PM) —My question is addressed to Senator Kemp, the Assistant Treasurer. Can the minister confirm that a beast sent for slaughter becomes food for the purposes of the GST when the carcass is stamped `fit for human consumption'? Can the minister also confirm that, if the contract between the farmer and the meatworks transfers ownership of the beast at that point, the transaction is GST free? Can the minister advise the Senate how, for the purposes of applying the GST, the inedible parts of a beast will be treated at the time of its slaughter? Will the processor be required to pay GST on those inedible parts of each animal, or will the whole beast be treated as food at that point?

Senator KEMP (Assistant Treasurer) —The general principle is that food for human consumption is GST free. You would be aware of that. That is why we have had a number of stories in the press in recent days where people have gone around with their shopping baskets and shown that the prices of many items will fall as a result of the government's GST. That is a very big plus. In relation to the specifics of the question, I understand that these issues are currently being discussed with the NFF. If I can provide you with some further advice, I will.

Senator O'BRIEN —Madam President, I ask a supplementary question. At least I did not get the excuse that the matter had been traversed at estimates. The question is a serious one. I take it that the matter has not yet been determined. But is it not true that advice has been given to the industry that the GST will be applied in the way that I outlined—that is, when the beast is stamped `fit for human consumption', if the transaction for sale takes place after that point, the GST does not apply? Can you confirm that or otherwise? Can you confirm that the value of the inedible parts of beasts processed in Australia amounts to hundreds of millions of dollars?

Senator KEMP (Assistant Treasurer) —As I said, food for human consumption is not subject to the GST. I understand that compliance issues have been raised. These matters are being discussed with the government. I will provide you with advice as soon as I practically can.