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?