The cost of GST repeal has hit Australia’s meat and seafood industry.
The GST repeal is expected to reduce consumer spending by as much as $500m in 2019-20, according to the Australian Meat Association (AMA), which has said it will likely impact on the meat sector’s business.
“The impact will be felt particularly hard by the meat industry, which already suffers a $5.2bn loss due to GST, and who will now be left with less revenue, higher prices and a potentially worse return on their investment,” AMA President Mark Evans said.
“We are looking forward to the opportunities this will bring and the potential impact this will have on consumer spending, especially in light of the significant impact GST repeal will have for meat and poultry.”
The AMA has been lobbying the federal government for a repeal since 2018, but has been disappointed to learn that the repeal will come into effect on January 1, 2019.
The AMA says it will not be able to track how much money consumers will lose from the repeal and that it is disappointed the government has yet to publish the impact on businesses.
The meat industry’s losses The AMA’s annual report for 2019-2020 shows that, due to the GST repeal, the AMA expects its annual revenue will be $3.5 billion in 2019, up by $1.3 billion from last year.
“There is a real impact on all our businesses,” AMA chairman Mark Evans told the ABC.
The AMA’s chief executive Paul Smith said the industry was already facing major problems from GST and had seen the effects of a major downturn in the dairy industry in recent years. “
If we are to keep our business going, we need to have more money to reinvest in our businesses and provide the services we need.”
The AMA’s chief executive Paul Smith said the industry was already facing major problems from GST and had seen the effects of a major downturn in the dairy industry in recent years.
“In terms of meat and meat products, it’s an absolute crisis,” Mr Smith said.
Mr Evans said the AMA was working with the Federal Government to see how much of the $500-million loss it is expecting from the GST-related legislation will be covered by the $250-million in savings it is putting into animal welfare and food safety programs.
The association has estimated that meat production and processing will cost $8.8 billion over the next five years.
The AMAs annual report showed the industry will be hit with a $4.2 billion loss in 2019 from the removal of the GST.
“These are very serious times for our industry, and we are looking to all the stakeholders to work together to address these issues,” Mr Evans added.
“And I hope that we can come together and find a way to make these things work.”
Mr Evans also said it was likely the meat and fish industry would need to raise the prices of its products to survive.
“It is absolutely a very challenging time for the meat, fish and poultry industry and we will all have to find a path to cope with the impact,” he said.