Happy Birthday GST!
It has been one year since the implementation of the GST. The promises by the Federal Government that the GST was going to put MORE MONEY in our pockets can now be seen as a total failure. Average pricing on food and other products is at the same levels before the GST was introduced.
In various surveys recently conducted, the following has rang true:
More people are dissatisfied with the GST than ever before.
The GST has a negative effect on the economy as a whole.
Small business has suffered immensely, with the down turn in the economy, the failure of various Internet, Media and Telecommunications ventures and the pain of additional work to act as the government's tax collector.
Australia's implementation of the GST was a complete mess. The failure of the Government to learn from others who had made the same mistake in rushing in the GST without enough studies on its impact, leaves a lot to be desired.
So who has suffered the most?
Small businesses, in particular service businesses, which have felt the pain of additional accounting, having to drop prices on their standard rates to be competitive and have had to put up with the negative economy, have suffered. The main issue with small businesses is that it is becoming prevalent that clients of small business are taking longer time to pay accounts, with the GST Taxes taking payment preference in most small businesses.
Pensioners and other groups on welfare payments have had to put up with minimal increases in benefits only to see money disappearing on supporting GST payments.
The housing industry has also suffered, although there was a pre-GST boom, the Liberal governments "First Home Buyers Grant" has done little to increase approvals on new building projects in the last twelve months.
So who has profited from the GST?
Large Businesses and Multinationals are the only group that have profited from the GST. The decreases in company tax from before the commencement of the GST in total is allowing a 6% decrease in company tax paid on end of year profits.
The Federal government have made sure that there is so much of an excess of money in the Federal coffers (24 Billion Dollars of GST has been collected since the introduction), that they have enough to make more broken promises for the election period.
The cash economy has also boomed from the introduction of the GST, with more and more people preferring to deal in cash transactions in purchasing of services than before, avoiding the GST payment.
With no GST on exports and the drop in the Australian Dollar, exporters have profited from its introduction, which is beneficial for any industry, that exports product.
So who's to blame?
No doubt the one person who should shoulder the majority of the blame is Democrats leader Meg Lees. Without the support of the Democrats the GST would never have been passed in the Lower and Upper houses of Parliament. This is the second time the Democrats have sided with the Liberal Government on an issue, which has cost the everyday working Australian, dearly.
The public who voted for the Liberal Government need to take a hard look at each other and ask, "Are they better off now or before the GST?"
The Liberal Government who failed the majority of the Australian Public when they introduced the GST.
And the biggest broken promises?
Lifting of all taxes. Currently the government is playing the election campaign, announcing the removal of Stamp Duty for Share trading and on Bank Transactions. Stamp duty is a TAX; these along with all other Stamp Duty Taxes (such as stamp duty on Car Registrations and Stamp Duty on Petrol) should have been eliminated twelve months ago.
The Pensioner $1000 one off payment was another election lie, as many pensioners didn't receive a cent, even though the government promised that all pensioners would receive the payment.
Petrol price increases have been prominent with Petrol still loaded with Government stamp duty tax and GST.
So what is in store for the GST in its second year?
Well there is hope. The Labor and Democrats (under a new leader) have announced that they intend to rollback the GST if elected. Although details are a little sketchy at this stage it is one to look out for. The key for the success of the rollback is going to lie in how the majority of Australian's suffering from the impact of the GST are going to be addressed and what policies will be introduced to help them through the tough times.
If the Liberal government do win another GST election, we could unfortunately be in for more bad times and Howard still hasn't ruled out an increase in the GST in years to come.
- Annemarie Failla & Damian London