THE protracted debate over whether or not women’s sanitary products should attract a goods and services tax has finally been laid to rest, but it’s just a single battle in a longer war.
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From January 1, Australian women will no longer have to pay GST on tampons and pads after all states and territories finally agreed to add a long list of sanitary products to the list of exemptions.
And few could argue with the change.
When items such as condoms and Viagra have always been GST-exempt, the suggestion that they could be considered essential items while women’s sanitary items were a luxury was simply outrageous.
In terms of equity, the government had no choice but to remove the tampon tax and the only real surprise is that it has taken 18 years and – and five changes of prime minister – for it to finally happen.
But that doesn’t mean it is the right decision.
One of the issues with Australia's GST has always been the debate over what should and should not be exempt, but that was not how it was ever intended to be.
The simplicity of a GST – where all goods and services are taxed at a flat rate – is also its beauty.
The GST was introduced to better reflect Australia’s spending habits and to capture new revenues from the growing services sector.
At the same time, a confusing raft of state and sales taxes were abolished to further simplify the taxation system. At least until politics got involved.
When it became apparent that the only way they were ever going to have a GST passed through parliament was with the support of the Democrats, John Howard and his treasurer Peter Costello were forced into negotiations with leader Meg Lees that centred on what would not be taxed.
It was the beginning of the end, and the start of 18 years of debate over where the luxury-essential line should be drawn.
So far better than celebrating the inclusion of women’s sanitary items on the exemptions list would be the removal of condoms and Viagra from it – along with everything else.
The challenge for government would then be redirecting that increased revenue to better supporting the country’s low income earners to counter the rising costs.
That’s placing a lot of trust in the government to get it right, but they would pay for it with their jobs if they were to get it wrong.
