The ‘tampon tax’ will be removed – Significantly, he reported, there was unanimous agreement amongst the States to remove the GST on feminine hygiene products (the States and Territories are the beneficiaries of the GST revenue and have to agree to any change to the GST base). It was the Commonwealth, however, that placed this long standing issue on the agenda. It will be removed from 1 January 2019 (next year).
Distribution of the GST revenue between States and Territories – the discussion also covered recommendations handed down by the Productivity Commission. He noted that, in the next sitting week of Parliament, the Government will introduce legislation that will:
- Establish a more stable and predictable equalisation standard, based on the fiscal capacity of the stronger of New South Wales or Victoria;
- Introduce a GST relativity floor, initially set at 70 cents and ratcheting up to 75 cents in 2024-25; and
- Permanently boost the GST pool with direct Commonwealth cash injections.
Our reforms will deliver a fairer and more sustainable GST deal for everyone and, based on the Productivity Commission’s data, will make every state and territory better off.
This will guarantee an extra $9 billion in funding over the next 10 years – this means more money for schools, hospitals, roads and police.