The case for widening the GST

The goods and services tax is often labelled 'regressive' but there are ways to help ensure lower income earners aren't disproportionately affected by expanding the tax to fresh food.

It is popular to argue Australia’s goods and services tax is a 'regressive' tax, and on that basis, extending the tax to fresh food would be objectionable. Indeed, since people on lower incomes spend more as a proportion of their income on food – it is a tax that hits the poorest hardest. As a consequence, widening the base of the GST would disproportionately impact lower income earners.

But is this a knockout blow for the argument against assessing the GST on fresh food? That it is regressive and unfair and impacts lower income earners disproportionately?



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