Tuesday, 14 August 2018
Goods and Services Tax
That the Senate:
(a) notes that:
(i) in contrast to New Zealand's comprehensive GST, Australia's GST does not apply to a significant range of products, such as various healthcare products, essential services including water, and basic food and beverages,
(ii) healthcare products that are listed as GST-free in the A New Tax System (Goods and Services Tax) Act 1999 (the GST Act), an Act of the Commonwealth Government, include medical devices and aids such as incontinence pads,
(iii) the Minister for Health is empowered under section 38 of the GST Act to unilaterally declare additional goods to be GST-free – previous Commonwealth Health Ministers have used this power to make various goods GST-free, including condoms, lubricants, folic acid, sunscreen and nicotine patches and gums,
(iv) infant formula is GST-free under the basic food and beverage category,
(v) GST on breastfeeding aids is estimated to contribute less than $2 million to the $63 billion in annual GST revenues,
(vi) breastfeeding aids are essential healthcare products for many mothers and their babies, and
(vii) it is therefore inequitable for incontinence pads, condoms, lubricants, folic acid, sunscreen, and nicotine patches and gums to be GST-free on health grounds, for water to be GST-free on the grounds of water being essential, and for infant formula to be GST-free under the basic food and beverage category, but for breastfeeding aids to be subject to GST; and
(b) calls on the Federal Government to remove the GST on breastfeeding aids.
Under the Intergovernmental Agreement on Federal Financial Relations and Commonwealth legislation, a change to the rate or base of the GST would need to be supported by all the states and territories in addition to the passage of relevant legislation by both houses of the Commonwealth parliament. Section 38-47 of the A New Tax System (Goods and Services Tax) Act 1999 relates to other GST-free health goods. Under this section, a supply of goods is GST-free if it is a supply of goods of a kind that the health minister, by determination in writing, declares to be goods the supply of which is GST-free. The health minister may make a determination under section 38-47. However, the states and territories would need to agree unanimously, and the wider policy implications would need to be considered accordingly.
Question agreed to.