How to tax food and make the tax system more progressive at the same time

Abstract

Australia's Commonwealth government is claiming that it has a mandate to introduse the reforms it put to the voters at the October 1998 election. These reforms include a 10 per cent goods and services tax (GST) on a wide range of goods and services, including food. However, the Australian Democrats, whose members are close to holding the balance of power in the Senate, claim an opposing mandate. They promised to make the government's tax package 'fairer'. In particular, they have vowed to oppose a GST on food.