French president Nicolas Sarkozy won his majority in Sunday’s legislative elections, but it was a good deal less than expected. The opposition Socialists increased their numbers from 141 to 186 in the 577-seat National Assembly.
All reports blame the new government’s disappointing result on its plan to increase France’s Value Added Tax (TVA), or GST, to offset cuts in income and inheritance taxes. Its promises that this would not increase the cost of living were apparently not believed.
Which raises the question, how much continuing electoral impact does the GST have in Australia?
Yesterday’s Newspoll results confirm what I have been saying for a few months, that voters appear to have largely made up their minds about this year’s federal election. If that’s true, it may be because they had decided to vote out the government some years ago, and only dissatisfaction with the opposition was holding them back.
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And one obvious reason why opinion turned against the Howard government
— first in 1997-98, and then more savagely in 2000-01 — was the GST.
Commentators usually dismiss this idea, telling us that the GST has been a great success and that everyone now accepts it as necessary. But it’s not clear that the public agrees with them.
The GST is a classic issue of “elites” versus the rest: opinion leaders don’t do their own tax returns, don’t run small businesses, and don’t worry much about the cost of living. So they cheerfully proclaimed, and still do, that the introduction of the GST went smoothly and the scare campaign against it was unjustified.
But whereas on most issues a chorus of right-wing pundits stand ready to accuse the elites of being out of touch, when it came to the GST they stayed silent. As far as I recall, John Stone was the one honorable exception.
A few months ago, the government even tried a scare campaign on the prospect of Labor colluding with the states to increase the GST — a campaign that seems to have been quickly dropped, since, from the government’s point of view, the less people think about the GST, the better.