When the Howard Government navigated his GST reform package through the Senate at the turn-of-the-century, it was forced by the Democrats to exempt fresh food, health and education in a bid to protect lower income earners from the GST’s regressive impacts.
Reserve Bank board member, Ian Harper, is among those now calling on the GST rate to be broadened, claiming it “is not a broadbased consumption tax anymore”:
[Harper] said the changing structure of the economy, in particular the rapidly growing share of the health sector, has led to a progressive shrinking of the GST base. This evolution is “bound to” accelerate in the wake of the pandemic, he said. “If the minister (Senator Cormann) is saying lifting the rate is not a good idea, then we should extend the base. We can’t avoid the fact this is not a broad-based consumption tax anymore”…
