The article (in the other post) states that approx $4 will be saved on $30 of zero-rated goods, this isn't a great starting point but none the less it is what I am going to use. If we assume that on average $4/week for every household will be saved, that is $4/week that the isn't being collected by the government per household. Wouldn't it be better to keep collecting that $4/week of 100% of households and funnel $40/week to the 10% of households that are in need?

I believe that targeted programs are far more effective then generalist ones; obviously the numbers are very vague, but for the top 50% of the population the $4/week will not be noticed, but I guarantee that $40/week would be noticed by the bottom 10%. Obviously the net is that the bottom 10% are $36/week better off. Everybody else is at the same position as they are now.

[–] Dave 2 points 1 year ago

Often targetted programmes miss those who truly need it. A common example given is free school lunches. If the whole school gets free lunch then the kids that really need it are more likely to get what they need, rather than only offering it to students that can prove low income.

Another example is unemployment benefits. Homeless people often don't qualify because they don't have a bank account (and can't get one without an address), so miss out on support they sorely need.

With that said, GST exemptions benefit people with more money more than they benefit people with less money, so it's not great from that perspective.