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The current debate about whether to remove the GST on tampons is a great example of how the big picture gets lost in a fight about narrow issues of marginal benefit, for women, or all of us.

A worldwide movement to remove taxes on sanitary products has received momentum from women and student activists and from people on the left and right of politics. Australia has just joined the bandwagon. As a feminist, I have to say: it’s misguided.

It’s hardly surprising that women are annoyed. In a system where, as is well known, condoms and Viagra, and adult sanitary needs, are excluded from the GST, this is a clear inequity. But the issue is not so clear if we zoom out to see the bigger picture.

Has anyone stopped to wonder why this issue has got so much political traction? Why is this a win? Three reasons: it’s cheap, it’s marginal and it’s easy. Politicians love delivering a tax cut, and this one makes the government look feminist while not costing too much in the overall scheme of things. And it plays nicely with calls to reduce taxes overall and cut the size of government – which can only go badly for gender equality.

This issue distracts us all from the big gender issues we face today: sharing the cost of care, equal access to decent wages, an end to male violence against women, the gender pay gap, and adequate retirement savings. These hard issues need more revenues, better governance and a continual commitment to equality of women and men.

Let’s assume sanitary pads cost $7 a pack. The GST is 70 cents. It’s small, but it’s not nothing. We should be worried about women’s poverty. Women on youth allowance, sole parent pension or Newstart don’t have enough to live on. The solution is to increase income support. The number of elderly women in poverty is growing fast. Unfortunately, a removal of GST on tampons won’t help them at all.

More transparent

I wonder how many people realise that sanitary products are taxed in the income tax: we don’t allow a deduction for this personal consumption item. In fact, condoms and Viagra are also taxed under the income tax. We address inequity there, by providing progressive rates and a tax-free threshold. It would be fairer and more transparent to levy GST on a broad base of consumption items, and deliver public health services and products – including sanitary products – free or at a low cost to those who need them. That is done in schools, health clinics – and prisons! – in New York state, and in new programs in towns in Sweden and Scotland.

In New Zealand, a 15 per cent GST applies to almost all consumption, including sanitary products. The Tax Working Group is moving towards release of an interim paper for tax reform there. As the Secretariat report observed, there would be small gains to women, including lower income women, if the GST was removed. But this distributional win does not outweigh the administrative and other downsides of administering yet another small exemption, with a revenue cost. Meanwhile, a New Zealand supermarket has committed to slash its home-brand sanitary product prices by 50 per cent: swamping the economic benefit of removing the tax.

We can keep nibbling around the edges of this GST biscuit: but if we are not careful there won’t be much left. Why is baby formula GST-free, but breastfeeding equipment – which is expensive – taxed? This inequity goes against all the evidence on public health and the best food for babies, and for women’s health. Meanwhile, there have been calls to remove GST from electricity bills where the issue is pricing, gold plating and failures in electricity supply networks – not the tax.

We can and should take women’s public health needs and poverty seriously. We should also take the unequal and gendered effect of Australia’s current tax and welfare system seriously. I call on our state, territory and federal treasurers to demonstrate proper stewardship of our second most important tax base. That means protecting a broad tax base, removing exemptions and raising the rate. The funds raised should be spent on public health, social security and education.

First published at the Australian Financial Review on Wednesday 3 October 2018.

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