AU - GST Compliance Costs Could Exceed Y2K According to One Analyst : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

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Business battling GST blowout Michael McKenna - The Courier-Mail 22may00

COSTS for Australian businesses preparing for the GST have blown out with a nationwide survey showing some small operators are spending more than $1 million.

Despite the Howard Government's estimates of an average pre-GST bill of $360, the survey found a third of small businesses, with fewer than 20 employees, predict their costs will be at least $100,000. And according to the Morgan & Banks survey, 13.8 percent of small operators have estimated their compliance bill will rise above the $1 million mark.

The survey of 4000 Australian organisations, from every sector, has foreshadowed an emerging problem for the Government as it nears the July 1 introduction of the tax.

Despite Treasury assurances that business could easily cope with the GST, with free software and tax office assistance, the survey found a quarter of all businesses will spend at least $100,000 on new computers and staff ahead of July 1.

Morgan & Banks managing director Geoff Morgan said the new danger for the Government was that business now would pass on the soaring costs of GST compliance to consumers.

The survey also showed that while most businesses were prepared for the GST, major disruptions to the economy were expected during the transition with staff and resources redirected to cope with the new tax.

Mr Morgan said Queensland businesses would have the highest GST bill, with more than 19 percent expecting to spend more than $1 million in preparation.

The survey supports an industry analysis by accounting firm Arthur Anderson, which predicted GST compliance costs would double the $12 billion spent in preparing for the Y2K bug.

The findings were released as Employment, Workplace and Small Business Minister Peter Reith conceded that business confidence had fallen slightly as the focus turned to GST preparation.

Mr Reith said confidence would bounce back after business reaped the benefits of the tax reforms.,3533,711601%255E3122,00.html


-- (, May 22, 2000

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