Hundreds of thousands of New Zealanders would receive taxpayer subsidies to buy healthy foods under a new system proposed in research commissioned by the Ministry of Health.

Health economist Des O'Dea and colleagues have suggested the Government set up a smart-card electronic subsidy system that would be similar to the food stamps now given to low-income families in the United States on an electronic debit card.

It would be aimed at reducing "food insecurity" and encouraging consumption of healthy foods in low- and middle-income families with children to reduce New Zealand's internationally high rate of obesity.

Mr O'Dea, of Otago University at Wellington, told the Public Health Association conference in Dunedin yesterday that a number of families faced difficulty obtaining enough food at times. "When you are short of cash, you often go for the high-energy foods - junk foods."

In the research, financed by the ministry and the Health Research Council, Mr O'Dea and his colleagues evaluated removing GST from basic healthy foods but decided this was a bad idea as it would destroy the simplicity and efficiency of the tax and would benefit rich and poor alike.

But an electronic smart card could be targeted at those on lower incomes such as working-age beneficiaries, of whom there are more than 300,000, and those who receive the Working for Families tax credit.

He estimated this would cost the Government around $100,000 a year.

Mr O'Dea said pensioners should be excluded because they had not been found to experience food insecurity.

However, separate research presented to the conference disputed that assertion, finding that the elderly are affected by food insecurity, although at a lower rate than younger people.

Mr O'Dea said there would be debate about which foods should attract the subsidies of about $5 a week per child, and it should be left to state food authorities to decide.

Statistics New Zealand data shows that the average household spent $155.60, excluding GST, on food in 2006-07. This included $18.40 on fruit and vegetables.

The ministry declined to express a view on the research.

It said it recognised the benefits of good nutrition, adequate food and increased physical activity and wanted to consider the several papers written by the research group on the smart card and other nutrition topics before commenting.

How it would work:
* Electronic card issued to beneficiaries (other than pensioners) and to households receiving Working for Families tax credits.
* Government tops up card by about $5 a child each week.
* Card swiped at shops to obtain discounts on healthy foods.
* Foods could include fresh fruit and vegetables, milk, wholegrain breads, low-fat meats, fish.