1) Draw a clearly-labelled diagram to help explain what the effect of removing the “tampon tax” will have on the market for sanitary products. Be sure to explain what impact this will have on price and quantity and the likely magnitude of the change.

2) Use your diagram to help explain why the State governments might not have been expected to support the change.

3) Critics of the move to cut the tax have said that it is token policy that won’t have real impact to improve the financial situation of women in Australia. Describe another government policy change that could be implemented to improve gender equity in Australia.

Do a simple search of “tampon tax” with “silly” or “token feminism” to find some articles giving some ideas.]

Tampon tax closer to being axed after Federal and state governments show support

Millions of Australian women will soon be able to buy tampons and pads without having to pay the Goods and Services Tax (GST).

The Federal Government on Saturday revealed it was again pushing for women's sanitary products to be exempt from the 10 per cent GST.

Federal Treasurer Scott Morrison vowed to remove the GST on tampons, describing it as an "anomaly" and a source of frustration for women.

Mr Morrison admitted the 10 per cent tax should never have been applied to sanitary products in the first place and said it was time the issue was "remediated".

"I can see it is a source of frustration and angst. Here's a straightforward practical opportunity to deal with it once and for all," he told News Corp.

"I think it's an anomaly that has been built into the system for a long time and the states have decided to hold onto the money instead of getting rid of it."

The ABC has spoken with state and territory governments, and every jurisdiction is supporting the proposal.

Queensland's Labor Treasurer Jackie Trad declared her state was "100 per cent supportive" of scrapping the tax.

"This reform is long overdue," she said.

"We believe it is a regressive tax on women … and fundamentally unfair.

"This is something that women have no control over, it is something absolutely necessary in their lives and it shouldn't be taxed."

New South Wales Liberal Treasurer Dominic Perrotet also gave in-principle backing and indicated his state was willing to forgo the revenue.

"I think the public will overwhelmingly support this decision, I think it's been on the agenda for many years," he said.

"I welcome the Government's decision today."

The GST on tampons and sanitary products has been a hot political topic since the tax was introduced in 2001, with opponents describing it as sexist and unfair, particularly when items such as condoms and Viagra are exempt.

Governments supportive despite revenue loss

Treasurers from around Australia will discuss Mr Morrison's proposal to remove the GST from feminine hygiene products at their next COAG meeting later in the year.

Removing the tax would cost the Government about $30 million a year in revenue which goes to the states and territories.

WA Premier Mark McGowan welcomed the removal, saying his party has always supported the removal.

"We are standing up for Western Australian women and the lift of the tax on these products, which are essentials of life, is long overdue," he said.

"The [WA] State Government looks forward to working with the Commonwealth to replace the revenue lost to ensure WA gets a fair deal."

The South Australian Government said it would support scrapping the so-called 'tampon tax', even though the State will lose about $3 million in GST revenue each year.

State Treasurer Rob Lucas says they'll consider adding the GST to home therapy services which have previously been excluded from GST to make up lost revenue.

"We're prepared to accept that particular position even though there's been controversial debate for 15 years on the issue," Mr Lucas said.

"We've already started having the discussions as to whether or not there are compensating options which might compensate the state's for lost revenue."

The NT's Labor Treasurer, Nicole Manison, said after lobbying Scott Morrison to scrap the tax for the Territory she is glad to see this job done.

'There's no great gender conspiracy here'

Federal Labor recently promised to remove the tax and to make up the money by applying the tax to some forms of alternative therapy including herbalism, iridology and aromatherapy.

Shadow health minister Catherine King said Labor's plan would ensure the states and territories do not miss out on any revenue and dismissed Mr Morrison's announcement as an unworkable "thought bubble".

"This is exactly what [Joe] Hockey announced and it went nowhere because there was no plan for replacement revenue," she posted on Twitter.

"Labor announced a fully funded plan to axe the tampon tax months ago.

"This isn't even catch-up policy. It's kite flying."

In 2015, then-treasurer Mr Hockey agreed the tax should probably be removed from sanitary products, but his intervention was not enough to have it scrapped.

Mr Morrison said the Government was giving it another try and hoped "common sense prevails" the second time around.

"There's no great gender conspiracy here or any of that nonsense," he said.

"This is just a practical issue that needs to be resolved."

But he said he was not proposing to tax other items to make up the shortfall and argued the states were already receiving an extra $6.5 billion in GST revenue over the next four years because of changes the Coalition had put in place.

"If the states want to put the tax on other products they would all have to agree to that as well. But we're not proposing that," he said.

The proposal has broad support in Federal Parliament, with the Senate recently passing a motion to scrap the GST on sanitary products.

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1 DD is the demand curve for sanitary product tampon Due to removal tax on tampons the prices of tam... View the full answer