States and the Commonwealth argue over pressure to lower the GST on rapid tests

The Morrison administration says it will only consider removing GST from rapid antigen testing if state governments join forces, some of which are pushing the Commonwealth to take the lead.

The big antigen testing company, Chemist Warehouse, has campaigned with the federal government to get rid of the surcharge and has promised to cut prices by 10 percent if it does.

A sign on the door of a Melbourne pharmacy informs customers that rapid antigen tests are sold out.

A sign on the door of a Melbourne pharmacy informs customers that rapid antigen tests are sold out.Credit:Chris Hopkins

The state governments in Victoria, NSW, Queensland, and South Australia are open to the change, although it would cost their budgets as the states receive the GST revenue.

In yet another clash between the states and the Commonwealth over rapid testing, the Victoria and NSW governments said the federal government has primary responsibility for all GST spin-offs.

Meanwhile, Queensland and South Australia governments said they would only support an exception if the Morrison government guaranteed it would try to stop retailers from selling antigen tests at exorbitant prices. Prime Minister Scott Morrison announced new penalties on Wednesday to ban this behavior.

The pressure to cut testing costs comes along with a national debate about how to get antigen tests, which are scarce, while governments are urging people to use them instead of PCR tests. The federal government has been criticized by Labor governments for failing to purchase the tests in bulk months ago.

Josh Frydenberg and Scott Morrison

Josh Frydenberg and Scott MorrisonCredit:Alex Ellinghausen

A Victorian government spokesman said the application of GST to home testing was a secondary issue compared to the “failure of the Morrison government to adequately procure and fund the tests.” “The main responsibility for introducing a GST exemption rests with the Commonwealth government and we will review each proposal for merit,” he said.

A government spokesman for NSW did not elaborate on whether it supported a change, but noted that the Treasury Department chairs the subcommittee responsible for recommending changes to the GST. “All GST exemptions are set under Commonwealth law and require the approval of the Commonwealth government,” the spokesman said.

Source: | This article originally belongs to smh.com.au

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