Cancer drug tax ‘outrageous’
A Nelson man with cancer is concerned the Government is taking millions of dollars in tax on expensive unfunded medication that many patients need.
John Mitchell noticed while paying for two months worth of cancer medication recently that the GST component on his $14,800 bill was $1900. ‘‘I thought: Cheeky blighters, this is actually outrageous,’’ Mitchell said. ‘‘Not only is the Government not funding the drugs but they are creaming off quite a significant sum.’’
Mitchell has mantle cell lymphoma, an aggressive, rare cancer of the white blood cells.
The 78-year-old has been lobbying the Government for a tax exemption on unfunded drugs.
He said he did not want to highlight his own case but knew there were others who were struggling to afford medication that was not funded, in order to survive.
‘‘There must be hundreds of us around the country on these sorts of drugs that are not funded by Pharmac or by anybody else, from whom the Government is making millions of dollars in GST.’’
In the past 10 years, Mitchell and his wife have spent roughly $130,000 on the drugs needed to fight his lymphoma. In the past year, they forked out $88,800 for the targeted treatment Ibrutinib, and $11,582 of that was tax.
Mitchell wrote to several ministers to ask about a GST exemption on unfunded medication.
He was shocked to receive a response from Health Minister David Clark a month later, saying he was advised by Inland Revenue officials that allowing an exemption for one type of goods or service, such as cancer medication, would lead to other such requests.
‘‘Allowing exemptions would also likely lead to an increase in taxes elsewhere to recover the loss of revenue,’’ the letter read.
Mitchell said he thought that was an ‘‘utterly outrageous statement’’, as it implied the Government depended on tax from people who were ‘‘otherwise doomed’’.
He said the Government could at least offer a concession to those who were still income earners, by making the GST able to be claimed on an annual tax return.
A spokesman for Clark said it ‘‘would not be appropriate for individual ministers to weigh in on tax policy’’. The advice about the impact on the tax base in Clark’s letter referred to the effect of multiple exclusions, rather than a single exclusion for cancer drugs, the spokesman said.
A spokeswoman for Revenue Minister Stuart Nash said: ‘‘Applying GST with minimal exceptions ensures the tax is as fair as possible, as it applies equally to everyone.’’