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Labor Treasurers Call For End To Oz 'Tampon Tax'

by Mary Swire,, Hong Kong

14 August 2015

Labor party treasurers from Victoria, South Australia, Queensland, and the Australia Capital Territory have confirmed that they will seek to have the goods and services tax (GST) removed from sanitary products when they next meet with federal Treasurer Joe Hockey.

In a joint statement, the treasurers said: "Currently, Australian women spend close to AUD300m (USD221.4m) on sanitary products, but unlike condoms, lubricant, and sunscreen – which are all exempt from GST – they also pay [the ten percent] GST on those purchases."

The treasurers said their proposal has the support of the federal Labor Party. They urged their counterparts in New South Wales, Western Australia, Tasmania, and the Northern Territory to back the reform.

"The change is simple. Once the proposal receives the unanimous support of the states and territories, the federal Health Minister can declare by determination, the supply of a good to be GST-free," the statement explained.

The Australian Government is currently conducting parallel tax and federation reform white paper processes. There have been calls from numerous business associations for the GST base to be broadened and the rate increased, and New South Wales Premier Mike Baird has recommended a five percent rate hike to fund healthcare reform. Hockey has however made it clear that the Government will consider only those GST reforms that have the unanimous support of state and territory governments and bilateral support in the federal Parliament. He has also said that tax reform, covering all taxes, should be revenue-neutral.

According to the treasurers, the revenue lost by removing the GST from sanitary products would be more than covered by its application to digital downloads. At last month's Council of Australian Governments, Australia's federal and state leaders agreed in principle to broaden the GST to cover overseas online transactions under CAD1,000. "This represents a rare opportunity for the Commonwealth to remove the GST from sanitary products without decreasing GST revenue to the states," the statement concluded.

TAGS: tax | business | commerce | public health | goods and services tax (GST) | Australia | tax thresholds | ministry of finance | e-commerce | tax rates | tax reform | services

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