Greens economic justice spokesperson Nick McKim labelled the proposed increase to fresh food and utilities, instead of increasing taxes on big corporations, as “lazy”.

Meanwhile, Opposition finance spokesperson James Paterson said it would be an “incredibly brave government” that would tax insurance or private education fees, which are exempt from the GST.

Opposition finance spokesperson James Paterson has labelled a proposed GST increase as “brave”. Source: AAP / Mick Tsikas

“The Howard government recognised that people who spend their money on private health or private education are actually taking a burden off the public purse, and therefore it would be unjust to tax them on top of that,” Paterson told Sky News.

Here’s what’s being proposed and why it would impact your grocery bill.

What changes are being proposed?

The effect on low-income earners would be mitigated by one of two options under a GST-free threshold:

• Providing an annual $3,300 up-front payment to all Australians over 18 years old;
• Or exempting the GST on the first $22,000 in transactions when you swipe your registered debit or credit card at the checkout.

The Parliamentary Budget Office estimates the changes would generate an additional $23.8 billion in revenue, even after applying the GST-free threshold to all Australians.

Independent MP Kate Chaney argues the changes in revenue could be used to address bracket creep and inequality in the tax system. Source: AAP / Lukas Coch

Chaney told SBS News this leaves potential to fund “budget repair” or reduce income taxes for higher income earners.

How will the changes impact social inequality?

Both of which he thinks will be improved by the changes.