It’s that time of the month: let’s talk about periods. Or more specifically... let’s talk about taxing periods.
Ding dong, the tampon tax is dead!
In 2019, the Australian Government finally removed the GST (goods and services tax of 10%) on sales of tampons. A year into the glorious new age of period equity, we thought it might be worth revisiting the tampon tax change - and looking at the wider issue of gender-based taxation and pricing.
What happened and why did it happen?
The GST is designed to be a broad sales tax on goods and services across the economy, but there is a small list of products which are exempt. Advocates spent nearly two decades pointing out the unfairness of the GST-free list treating a range of sexual health-related products like condoms, femidoms, and lubricants (as well as sunscreen and nicotine patches) as medical necessities, while feminine hygiene products were treated as personal luxuries and excluded.
At a very basic level, the policy logic seemed to imply that menstruation is optional while sex is not a choice (and while we believe that sex is certainly a choice and maybe even a necessity... it is slightly easier to abstain than to hold back the red sea).
HuffPost estimates the full lifetime cost of periods at around $19,000 – that includes pads, tampons, pain relief, new underwear, and chocolate. Eliminating the tampon tax will have reduced that by about $1,000 – but $18,000 is still a pretty hefty portion of a housing deposit.
There also appeared to be a distinction focused on illness-preventing items: when the GST was introduced, the then-Minister for Health Dr Michael Wooldridge responded to concerns that feminine hygiene products would not be made GST-free by stating: “condoms prevent illness. I wasn’t aware that menstruation was an illness”. Cool guy.
However, the GST is a key source of revenue for State and Territory governments in Australia, with the GST on tampons bringing in around $30 million every year. For a long time, removing the tax was opposed on the basis that it would reduce revenues - even though it represented less than 0.05% of total GST revenue annually.
Campaigners began arguing for the removal of the tax around 2000, but it really gathered steam with the Axe the Tampon Tax and Stop Taxing My Period! campaigns (which gathered over 180,000 signatures on petitions).
In the Stop Taxing My Period! petition, women spoke about their sense of frustration:
“People who get periods don't buy pads and tampons for pleasure”
“I am a year 9 gal and recently we were asked to write a persuasive piece we were passionate about. I think it's an absolute outrage that things like condoms and lubricant are tax free when you can prevent sex, not your period”
“I wouldn't call it a luxury item"
“Again women are being treated like 2nd class citizens”
“This is just ridiculous, I just don't understand how we can be in 2018 and still be living like this”
“We shouldn't be taxed for our basic biology”
Eventually, growing community support and bipartisan agreement allowed the tax removal to go through Parliament in 2018, and be implemented in 2019. Along with tampons, the change removed GST on pads and liners, menstrual underwear, maternity pads, menstrual cups and other similar products specifically designed to absorb or collect lochia, menses or vaginal discharge.
We’re still waiting on the Cadbury and Panadol though.
So, what about the rest of the GST-free list?
There’s still some room to improve on gendered GST.
While the tampon tax has been removed, other essential products are still missing from the GST-free list. For example, breastfeeding products like pumps, nipple shields, and nursing systems are still charged GST, even though baby formula and other medical aids (including batteries for hearing aids!) are exempt. These aids are especially important for mothers with feeding troubles and sick / premature babies (allowing continued breastfeeding after a return to work).
So my periods are all good now, right?
Well... it’s better, but still a work in progress.
A report from Australia’s regulation watchdog, the Australian Competition and Consumer Commission (ACCC), found that not all of the tampon tax reduction had been passed on in prices to consumers. Yep, while Australian businesses have reduced their tampon prices by on average 9.1%, the report found that some companies "used the opportunity to improve their margins or adjust their prices".
Moreover, tampons could just be a lot cheaper, with the profit margins on feminine hygiene products remaining incredibly high: around 50%, according to The Economist.
And while the removal of the tampon tax does make a dent in the lifetime cost of menstruation, it remains an expensive and time-consuming biological reality for most women. The average woman will experience around 456 periods over 38 years, roughly equivalent to 2,280 days or 6.25 years of her life. HuffPost estimates the full lifetime cost of periods at around $19,000 – that includes pads, tampons, pain relief, new underwear, and chocolate. Eliminating the tampon tax will have reduced that by about $1,000 – but $18,000 is still a pretty hefty portion of a housing deposit (or a lot of avocado toast).
That said, there is also cause for hope. Around the world, many other jurisdictions have begun removing their tampon sales taxes - from a number of US states to India and Kenya. Moreover, the topic of menstrual justice (or menstrual equality) has begun to be recognised as an important ingredient in promoting economic development, women’s rights and human rights. A lack of access to menstrual supplies and appropriate facilities, on top of discriminatory cultural norms and practices, can prevent women and girls from maintaining good menstrual hygiene, not to mention denying them other basic rights. As Human Rights Watch reports:
Decisions about the operation of refugee camps, detention centres, schools, and workplaces that affect the way periods are dealt with directly affect human rights. With too little support to handle their periods, women and girls have reported staying home from school, missing work, banishment by families, and humiliating treatment in their communities.
So is it all good once we fix the GST-free list?
The double standard that drove the tampon tax is just one example of women being forced to shoulder higher costs due to gender. It’s related to the wider issue of the ‘pink tax’: the practice of charging more for similar or identical goods and services which are marketed towards women.
From higher mortgage rates, to dry cleaning, beauty products, razors, haircuts, clothes and cars, a whole range of consumer products have been shown to be priced more expensively for women, at substantial cost over a lifetime.
● A 2016 investigation by The Times newspaper found women paid on average 37% more for clothes, beauty products and toys.
● A study found women were charged on average 0.4% extra in interest on mortgages (for a similar financial profile and property) - translating to tens of thousands of dollars over the life of a mortgage.
● Smartphone cases in stereotypically female colours - pink - cost more than cases in gender-neutral colours like black.
● The New York City Department of Consumer Affairs (DCA) looked at the gender-based pricing disparities of nearly 800 products with male and female versions, including toys and accessories, children's and adult clothing, personal care products and home health care products. It found, on average, women pay about 7% more than men. Women's clothing costs nearly 8% more than men's, while personal care products — hair care, razors, deodorant, lotion — cost women 13% more.
Some jurisdictions in the US and UK have actually looked at introducing legislation to prevent gender-based pricing, and some retailers have committed to audit their own pricing structures for gender bias, but the practice remains widespread.
*This could be a little confusing, as the ‘tax’ here is actually being levied by businesses, not governments - think of it as a pink premium.
So what about the rest of the tax system?
The Australian taxation system as a whole doesn’t deliberately discriminate against women through higher gender-based taxes. But - many of the settings of the Australian tax system interact with structural social realities and cultural attitudes about what work is valued... in ways which disadvantage women disproportionately. For example:
● Women in Australia earn on average 13.9% less than men.
● Australian women do about five hours unpaid work on average per day, compared to three hours performed by men - including twice as much housework and caring responsibilities.
● Women retire with approximately half the superannuation balances that Australian men retire with, and older women are significantly more likely to experience poverty than older men (34% of Australian women over 60 live in poverty).
So, the bottom line is...
The tampon tax is just one piece of the puzzle - there’s still plenty to do!