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.