EXCLUSIVE
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Imposing GST on digital services and downloads would raise more than $3.2 billion in a decade, independent costings show.
Treasurer Joe Hockey announced the so-called Netflix tax in the days leading up to the budget in May. Labor backs the measure, which is slated to begin in 2017.
The budget papers show it would raise $350 million between 2017 and 2019. The government says the change will require the unanimous agreement of the states and territories.
Independent costings conducted by the Parliamentary Budget Office for the Labor Party reveal the tax would raise $3.2 billion in extra GST between 2017 and 2027.
The revenue would be distributed to the states and Labor says the costings show the premiers can more than afford to have the GST removed from tampons and other sanitary products.
Previous calculations show removing the GST on women's health products would cost the states $480 million over the decade.
Opposition finance spokesman Tony Burke said the data showed removing GST on tampons would not burden the states with lost revenue.
"We have, for the first time, a situation where the GST can be removed from tampons and pads and the states will still be more than $2.7 billion better off over the decade," Mr Burke said.
"It's time Tony Abbott and Hockey committed to making removing this unfair tax on these essential items part of introducing the Netflix tax," he said.
"It's been an unfair tax for too long. There's a chance to fix it now and the government needs to act," he said.
Mr Hockey agreed to push for the removal of the GST on tampons after being asked about it by a campaigner on the issue on live television.
Prime Minister Tony Abbott, in contrast, has said the government has no plans to proceed with the idea. Many of the states have signalled their support for the idea. Mr Hockey is due to meet with his state counterparts before the end of winter.
It's estimated the average cost of tax on tampons is around $10 per year per woman. Economists argue the GST should be extended to all aspects of consumption, including fresh food, health and education services, because it is a form of tax that cannot be dodged.
Bank of America Merrill Lynch economist Saul Eslake said Australia's GST is already one of the world's narrowest, applying to less than half (47 per cent) of household expenditure.
