From: chris@suite.sw.oz.au (Chris Maltby)
Subject: Re: GST - Bloody Stupid
Organization: Softway Pty Ltd
Date: 28 Sep 92 03:36:43 GMT

In <1992Sep27.081215.15398@newshost.anu.edu.au> ajg620@huxley.anu.edu.au (Andrew J Greinke) writes:

>Do you realise that already many goods on supermarket shelves are taxed at
>15%, some at 20% or 30%.  Many of these "hidden" sales taxes will be removed
>and replaced by a GST.  One advantage which I think will result is that by
>bringing taxes out into the open, it will be substantially more difficult
>for any government to raise them without good reason.

Yes, there are many goods which attract "hidden" sales taxes - but this
list does not include most basic food and clothing items. (For the
obligatory pedants, yes when you add the influence of tariffs, then
clothing has hidden taxes as well.) So the effect of GST will be to
maintain or reduce to prices of "luxury" goods and increase the price
of "essential" goods. Now it's easy to work out how evenly its burden
will fall.

>Under current arrangements, toilet paper is treated as a LUXURY item and
>taxed at the highest sales tax rate.

But toilet paper _is_ a luxury item. It costs us millions of hectares of
old-growth native forest to avoid irritation to our collective anal
sphincters. You can't get more luxurious than that. Why not try old
newspapers and avoid the tax, or stop griping about luxury?

>By applying a single rate, GST will also simplify disputes over
>classification of goods:  is an iced vo-vo a food or a confection?
>Note the current fiasco with the recent amendments to the Sales Tax
>legislation, and the fundamental drafting errors discovered in the Senate.

GST is also a way to get ordinary people to do the work of public servants
for nothing. Each small business (take the place you buy your lunch from)
will now have to do an extra hour (or so) of unpaid work each day to
calculate the amount of tax they now owe, and will have to deal with the
tax office bureaucracy on a regular basis to sort it out. Is this what is
called "improvements to productivity"?

Then there is the impact GST will have on service businesses. It amounts
to a new turnover tax on those sorts of operations. How is a turnover tax
any better than a payroll tax? Consider the contract cleaner who cleans
your office at the moment - they will be obliged to charge 15% GST,
whereas a staff cleaner would not attract any tax at all. Can you say
that the burden falls evenly on small and large organisations?

Now consider private schools. The school fees paid by the struggling
battlers who send their tykes to these slave camps will be zero-rated.
It seems that luxury services like these are not like other services
provided to the public. I guess there is a very good reason why you
can still call the GST "fair and equitable" in spite of this wee
anomaly. (Over to you David?)

My point (as usual :-) in all this is to point out that it's wise to
avoid all the religious posturing and snake-oil claims about any
policy; GST, free-trade, whatever, and consider the outcomes a little
more closely. After all, there are other ways to redistribute the wealth
of our nation...
-- 
Chris Maltby - Softway Pty Ltd		Internet: chris@softway.sw.oz.au

PHONE:	+61-2-698-2322	"I'm waiting for X-Windows to become just that;
FAX:	+61-2-699-9174	 Ex-Windows" - A McGrath.
Newsgroups: aus.politics