Tampon GST exemption under fire
The removal of the GST on tampons is emblematic of the dire state of political appetite for tax reform that would deliver better results for Australians, leading tax experts have declared.
“It’s hardly surprising that women are pissed off,” said Melbourne University tax expert Miranda Stewart. “(But) it’s wrong to introduce another exemption.”
Ms Stewart told the Economic and Social Outlook Conference that governments needed to realise they were stewards of the tax system that needed to provide for all Australians.
“There are many inequities in the system. The GST (revenue) is for the benefit of all,’’ she said.
“It needs to be broadened and strengthened, not undermined.”
State and territory treasurers unanimously agreed last week to axe the GST on feminine hygiene products from January.
Essential items, such as fresh food and medical products, are exempt from the 10 per cent tax that was introduced by the Howard government in 2000.
Ms Stewart said Australia could consider New Zealand’s consumption tax, which has no exemptions, allowing the government to redistribute wealth thanks to the robust revenue base.
Chris Richardson of Deloitte Access Economics said this year’s outlook conference was the “saddest” in his history because of the lack of optimism about the appetite to positively change the tax system.
“We are having terrible conversations with ourselves. If you ask me what we can do, I say we pray,” Mr Richardson said. “I’ve tried across my career to fight very hard to leave Australia and the world a better place. It’s not clear that we’re going to move the dial that much. It will be about protecting what we already have.”
Robert Breunig, director of the Tax and Transfer Policy Institute at the Crawford School of Public Policy at Australian National University, said the tax system was in crisis.
It was overly complex, with more than 150 different taxes, and losing 12 per cent of revenue through administration. He said Australia needed to introduce a death duty to deal with intergenerational inequality.
“Death duties are good taxes. They don’t distort behaviour very much. You want to create a system where people can’t get around it,” he said.