The 10% levy on sanitary products is about to be removed, as Australian treasurers unanimously decided to eliminate it from the GST.
The tax is set to be scrapped in January 2019. The final details are yet to be released, so it is unclear as to which products specifically will be made cheaper.
The push to abolish the so-called “tampon tax” has gone on for almost twenty years, ever since menstruation products were incorporated in the Howard government’s choice to bring the GST to Australia in 1999. The sanitary products were controversially not granted the health goods exception, despite products such as lubricant being given the exception.
Many attempts to remove the tax had previously failed, likely due to the large amount of revenue it produces – around $30 million in Australia every year.
However, the increase in numbers of females in government in recent years, as well as the growth of the grassroots anti-tampon tax movement, has contributed to the new changes in policy.
Across Australia, all states agreed that they wanted a legislated guarantee from the government that they would not be worse off after the new changes to the GST. Treasurers also agreed that this legislation was important.
There are concerns around the loss of funding that may come with the changes to the GST, with New South Wales potentially losing between $722 million and $1.1 billion. However, Western Australia may gain between $9.5 billion to $11 billion.
In response to these concerns, the federal government has suggested a GST “floor”, in which states would not receive less than 70% of the GST revenue it received between 2022-23 and 75% of the GST revenue from 2024-25.
There are some concerns that the removal of the tampon tax is a distraction from larger issues, such as the provision of free sanitary products to low-income consumers.
Overall, the removal of the tax on sanitary products will be of benefit to low-income consumers, and has been hailed as a win for feminists.