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Thread: 15% GST proposal, good, bad or is it a non issue?

  1. #16
    Senior Member steveo's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    true Geoff. But the only one it really catches are the honest people who don't work in the cash economy which is the vast majority of Australians. Also hurts pensioners, unemployed, the sick and the vulnerable. A lot of those people are lawn mowing customers.

  2. #17
    Senior Member seliment's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Quote Originally Posted by steveo View Post
    lawnies who don't register for GST pay the 10% out of their pocket on all their expenses. People who register for GST can claim back the %10 they also spend on their expenses. Both need to charge to cover that %10. Their is no advantage except less paperwork. If a lawny who doesn't register is charging less than one who is registered he is undercutting at own expense (working for nothing).
    It's not exactly true - a 'worked example' sheds a bit of light on the issue.
    If there is a flaw in my reasoning, please correct me.

    Let's assume a straightforward situation.
    Fred (not Fred's hedgecutting ) does a job and has input expenses of $30+GST and wants to have $100 in his pocket at the end for his work..

    If NOT registered for GST.
    Fred collects $133 from customer.
    He pays $33 (GST incl) out for inputs, leaving $100 for his labour.

    If registered for GST.
    He initially pays out $33 (GST incl) for inputs.
    A $3 GST refund is then collected back from ATO, so actual input cost is $30.
    He wants $100 (in his pocket) for labour, so that means bill comes to $130.
    Add on GST of $13.
    So customer (who we assume is private, so not registered for GST or business expense) pays $143
    Fred sends the $13 GST collected to ATO.
    So after all the paperwork etc, Fred has the $100 in pocket for his labour.

    So comparing:
    On BOTH cases Fred gets $100 for work.
    Cost to customer is $133 if Fred is NOT registered for GST,
    $143 if Fred is registered.

    Conclusion -- GST screws the end consumer.

    Joe

  3. #18
    Member GAMS's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Quote Originally Posted by seliment View Post
    It's not exactly true - a 'worked example' sheds a bit of light on the issue.
    If there is a flaw in my reasoning, please correct me.

    Let's assume a straightforward situation.
    Fred (not Fred's hedgecutting ) does a job and has input expenses of $30+GST and wants to have $100 in his pocket at the end for his work..

    If NOT registered for GST.
    Fred collects $133 from customer.
    He pays $33 (GST incl) out for inputs, leaving $100 for his labour.

    If registered for GST.
    He initially pays out $33 (GST incl) for inputs.
    A $3 GST refund is then collected back from ATO, so actual input cost is $30.
    He wants $100 (in his pocket) for labour, so that means bill comes to $130.
    Add on GST of $13.
    So customer (who we assume is private, so not registered for GST or business expense) pays $143
    Fred sends the $13 GST collected to ATO.
    So after all the paperwork etc, Fred has the $100 in pocket for his labour.

    So comparing:
    On BOTH cases Fred gets $100 for work.
    Cost to customer is $133 if Fred is NOT registered for GST,
    $143 if Fred is registered.

    Conclusion -- GST screws the end consumer.

    Joe
    You are so right - end user pays - but that includes the "beer money Bobs" who plague our industry. It catches the cash economy and everyone pays, and those doing the right thing by being registered for GST can claim that input back. Secondly - we all have our hand out when the Govt is giving it (money)away or we can take advantage of programs , services etc. But - at the end of the day you have to pay the bill - and successive Govt's have handed money out like the printing machine was working overtime, but avoid the obligation of paying - so we have to pay. If you don't like it, make sure your pollies are doing the right thind. Thirdly, I lived with GST in NZ way before you got it here - and it was sooo successful the country got out of the crap and is still to this day in surplus. Why - not all the stupid concessions on gst ( thermometers up chickens bums to see if they are cooked or not so that one is exempt and the other isnt.) whereas in NZ three no gst exemtptions (i) financial transactions (ii) rent / not commercial leases (iii) second hand goods sold privately. Made it real simple and effective. If you have no gst - the country goes down the gurgler cos everyone trying to avoid tax where they can - gst on the other hand catches everyone. So get over it - live with it - it is a fact of life or revert to the stone age. Choice is yours.

  4. #19
    Senior Member seliment's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Quote Originally Posted by GAMS View Post
    You are so right - end user pays - but that includes the "beer money Bobs" who plague our industry. It catches the cash economy and everyone pays, and those doing the right thing by being registered for GST can claim that input back.....
    I disagree with your assertion about catching 'beer money bobs',
    And equally about 'those doing right things and being GST registered and their ability to claim inputs back' ..

    I am a GST registered small business owner (primary producer ), so have fairly reasonable first hand experiences of GST.
    You can see from the example I posted that the tax take (on the comlete job/transaction)by the govt is only $3 for the non gst registered operator, but $10 for the GST registered one.
    If the business turnover under $80k, then GST rego I'd not mandatory, and it is quite likely that many lawns are under this threshold.
    Thus it is obviously clear to me that the GST system is a nice way for the govt to quietly increase it's tax take in a 'not that transparent way' with GST registered business acting ad the tax collector.
    GST is not going to go far towards collection much fromtje cash economy -- in my example it wouldost likely be $3 from a 'cash operator' or 'beer bob', but $10 if done by a GST registered operator.

    I am not debating how much tax $ govt should collect, or how it should spend or not spend, but how and on whom the GST tax payments fall.

    Joe

  5. #20
    Member Macka's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Quote Originally Posted by steveo View Post
    If a lawny who doesn't register is charging less than one who is registered he is undercutting at own expense (working for nothing).
    Registing for GST and not earning over 75K is just giving money away.

    NOT registered for GST: If you have a $70,000 turn over and $20,000 expenses you get $50,000 income

    Registered for GST: If you have a $70,000 turn over and $20,000 expenses, you will need to pay 5k GST, so you get $45,000 income

  6. #21
    Senior Member Scooby Steve's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Quote Originally Posted by South East Mowing View Post
    Or get some balls and chase the companies that don't pay any, or little while shipping profits offshore! Nup, it's easier to take it out of john citizens pocket. Yes we live in the lucky country
    This is what pee's me off. Why not hit the companies that filter there profits offshore. Billions of dollars in taxes lost because of dodgy business practices. No lets do over the small businesses that least deserve it. As has been said it's the easiest option to hit the little man. Grows some balls pollies and hit the big boys where it hurts. It's our money they take so why not make them pay taxes here???

  7. #22
    Senior Member seliment's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Quote Originally Posted by Macka View Post
    Registing for GST and not earning over 75K is just giving money away.

    NOT registered for GST: If you have a $70,000 turn over and $20,000 expenses you get $50,000 income

    Registered for GST: If you have a $70,000 turn over and $20,000 expenses, you will need to pay 5k GST, so you get $45,000 income
    This is not factually correct (numbers wise)
    If registered for GST, you will be entitled to claim back the GST paid on your expenses, which will be 1/11 of $20,000 ie $1818
    So in fact you will be left with $46,818 not $45k.

    I agree that you will still be better off if not registered rather than registered, but not quite to the extent you calculated.

    There is another aspect however, when viewed from the customer side (eg me if I am a business)....
    If the contractor/supplier is registered for GST, the ACTUAL cost to me will will be 1/11 less than what I paid as I will be able to claim a refund of the GST from the ATO.
    If the contractor is NOT registered for GST, I cannot claim any GST back, so actual cost is what I paid.
    On that basis, if I am a BUSINESS customer, I would be looking for a cheaper price from the non GST registered supplier (basically I would be looking that the GST ex price from registered supplier was same as what non registered supplier was asking), or I would not be interested in dealing with a non GST registered suppplier.
    I have had this experience with contractors who erect farm fences -- often non GST registered and it becomes a real pain in the neck.
    Of course if I am NOT a business then it does not really matter --- just affects how much cut the taxman gets.
    So my bottom line is, if supplier is for my business, I (and probably many businesses) prefer NOT to deal with them unless they are registered for GST.

    Joe.

  8. #23
    Member Redeye's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Quote Originally Posted by Scooby Steve View Post
    This is what pee's me off. Why not hit the companies that filter there profits offshore. Billions of dollars in taxes lost because of dodgy business practices. No lets do over the small businesses that least deserve it. As has been said it's the easiest option to hit the little man. Grows some balls pollies and hit the big boys where it hurts. It's our money they take so why not make them pay taxes here???
    agree, except for the"dodgy business practices"....entirely legal here, the problem is our pollies only care about the big end of town and won't chase the multi-billions in tax that mining companies, for example, should be paying




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  9. #24
    Senior Member steveo's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    http://www.howrichareyou.com.au/

    Here is a plan. Kiwis have a %15 GST, australia %10. All those in favour of an increase move to New Zealand. That will mean less people here to fund and those who think the extra %5 can live happily over NZ, everyones a winner.

  10. #25
    Senior Member seliment's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Quote Originally Posted by steveo View Post
    http://www.howrichareyou.com.au/

    Here is a plan. Kiwis have a %15 GST, australia %10. All those in favour of an increase move to New Zealand. That will mean less people here to fund and those who think the extra %5 can live happily over NZ, everyones a winner.
    Does that mean the 'average' smartness of the population of each country increases as a consequence?

  11. #26
    Senior Member SunM's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Don't we have one of the lowest GST's in the world? The flip side is we have one of the highest costs of living, an increase in GST will see us sit on top of that chart for years to come.
    Cert III Arborist

  12. #27
    Member courty's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    I'm more than happy to pay more tax if it means better health, education and government services for everyone but sadly it never seems to happen that way.
    "I'm not alone cause the tv's on yeah,I'm not crazy cause I take the right pills.... everyday" Jimmy Eat World

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  13. #28
    Senior Member steveo's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Quote Originally Posted by courty View Post
    I'm more than happy to pay more tax if it means better health, education and government services for everyone but sadly it never seems to happen that way.
    exactly. And even if all the extra %5 GSt was spent wisely for the good of erveryone (cough cough spluter spluter), GSt is only one part of the tax system, can't look at it alone without looking at income tax, stamp duties, company tax, tax concessions for the rich etc etc. There are inequalities in other areas that a GST increase will not fix.

  14. #29
    Member Redeye's Avatar
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    Default Re: 15% GST proposal, good, bad or is it a non issue?

    ask Gina to cough up a fair share




    http://curraronggardening.com/

    "All sin is washed away in the Holy goodness of Beer"
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  15. #30

    Default Re: 15% GST proposal, good, bad or is it a non issue?

    Quote Originally Posted by Redeye View Post
    ask Gina to cough up a fair share
    C'mon mate

    She provides jobs for thousands of people & helps keep the banks in business! She is already doing her bit.

    I could say more but probably best not to.

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