Australian state and territory governments would forgo up to $75m in revenue over the four-year budget cycle if they agreed to a fresh push to exempt tampons and pads from the goods and services tax (GST), new figures suggest.
But the federal Labor party – which is backing the change – has argued it could be done at the same time as the new $350m “Netflix tax” takes effect, meaning the states and territories would be about $275m better off overall.
The treasurer, Joe Hockey, told campaigners last month that he would discuss the issue of a GST exemption for tampons at his next meeting with state and territory counterparts in July. He has asked the Treasury to provide a costing of the measure.
In the meantime, Labor asked the independent Parliamentary Budget Office (PBO) to estimate the financial impact of removing the GST from feminine hygiene products from July 2017.
The PBO found the move would reduce GST receipts by $35m in 2017-18 and $40m in 2018-19 – the final two years of the current four-year budget cycle. The fiscal balance impact would therefore be $75m.
Hockey’s second budget proposed extending the 10% GST to “cross-border supplies of digital products and services imported by consumers from 1 July 2017”, a move that became known as the Netflix tax because the popular movie and TV streaming service would be one of the companies affected.
Budget papers state the digital services measure was estimated to increase GST revenue by $350m over the forward estimates period.
Labor said the PBO estimate, viewed together with the budget figures, confirmed the states and territories would “still be better off if the removal is made in conjunction with the Netflix tax”.
“This represents a rare opportunity, not previously available, for the commonwealth to remove the GST from tampons and pads without decreasing GST revenue to the states,” Labor’s finance spokesman, Tony Burke, and the shadow treasurer, Chris Bowen, said in a joint statement on Monday.
“It’s time Tony Abbott and Joe Hockey got serious about removing this unfair tax on these essential items.”
The Howard government, which introduced the GST in 2000, resisted previous calls to exclude it from tampons. But the same government exempted items such as condoms, lubricant and sunscreen on the basis that they were health products.
Hockey committed to re-examine the issue when he appeared on the ABC’s Q&A program and was asked a question by campaigner Subeta Vimalarajah, whose petition “stop taxing my period” has now attracted more than 100,000 signatures.
When pressed by the host, Tony Jones, as to whether the GST should be taken off the items, Hockey replied: “It probably should, yes. The answer is yes.”
In a press conference the following day, Abbott played down expectations of exempting tampons by saying: “It’s certainly not something that this government has a plan to do.”
Labor suggested linking the issue with the Netflix proposal in a question to the prime minister in parliament on 26 May. Abbott replied that GST revenue went to the states and territories “and if all the states and territories can agree obviously we are happy to hear from them”.
The PBO costing released on Monday also showed the removal of the GST from tampons and pads would reduce GST receipts by a cumulative $480m in the 11 years after such a change took effect.
But the net impact over this timeframe is unclear because long-term estimates of the gain from the Netflix tax are unavailable.
