In the Thursday comments thread “Factory” writes,
One thing I didn’t get about the GST was that it was generally seen as a issue that was owned by the right, but similar tax regimes seem to be the norm in Europe.. hmm..
As I explained here, the reason for this, and for the unpopularity of the GST was that
the Australian advocates of a GST/VAT have tied this change to logically unrelated proposals for a change in the tax mix to give more weight to indirect taxation and for the removal of existing exemptions, notably for food. It is rather as if the advocates of metrication had suggested that the metric system was not worth having unless we also made French the national language and introduced the guillotine.
With the exemption of food, and the associated introduction of the Australian Business Number, the GST has improved the effectiveness of the tax system. The associated income tax cuts made the package as a whole regressive, but not nearly as much so as the previous proposals for a GST (Fightback! and Option C)>