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Why does GST apply to this vital necessity, but not others?

If GST isn’t applied to vital life necessities like medical services and water, then why does it apply to power? 

The issue was brought to Chris Smith’s attention after a listener contacted Ross Greenwood during Money News last night.

Listener James called in to ask a question.

“You’re supposed to have GST on everyday items like your water, you don’t have GST on water, why do you have GST on electricity? It’s an everyday thing people need to survive.”

Senator David Leyonhjelm has been campaigning to have the GST scrapped from energy bills. Last year he put forward a private member’s bill, but it was voted down in the Senate.

He tells Chris “there’s all sorts of inconsistencies” when it comes to what the GST is applied to.

Liberal Democrats Senator Leyonhjelm says the excuse was “we’d need the agreement of all the states”.

Listen to the full interview below