With Malcolm Turnbull ruling out an increase to the Goods & Services Tax (GST), it comes as little surprise that the majority of the Australian public and businesses are against any increase.
In research recently carried out by research company DBM Consultants, 77 per cent of Australians said that if the GST were to rise they would be worse off. This goes hand-in-hand with the views of Australian businesses, where 54 per cent felt the same way.
DBM Account Director Tim Honcoop says that a rise in the GST would clearly create a climate of uncertainty and negative sentiments for both consumers and businesses. “If GST was ever to be part of a tax reform package, members of the Australian public and businesses would be extremely suspicious of it,” says Honcoop.
(↑ indicates statistically significant difference at the 5% level of significance)
When asked whether they would be better or worse off with a rise in the GST, females are particularly wary of any GST increase, with 85 per cent believing they would by affected negatively (versus 68 per cent of males); Queenslanders too would not anticipate it with any relish (84 per cent say they would be worse off).
“With businesses passing on the possible 15 per cent additional costs, these findings show the extent to which the end-user, the consumer, would be losing out,” says Honcoop.
For business too, those industries that deal most directly with the general public – such as Retail; Accommodation & Food Services; and Arts & Recreation – are especially likely to struggle (79 per cent felt they would be worse off). When asked about possible changes in their customers spending, nearly half of all businesses and two thirds for those who deal directly with the public felt that their customers would stop buying from them.
“It is expected there will be a flow-on effect, leaving these businesses bearing the brunt of consumer reaction to any increase in the GST” said Honcoop.