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Legislative Assembly for the ACT: 2000 Week 2 Hansard (29 February) . . Page.. 384 ..

MR STANHOPE (continuing):

More than two years ago the Australian Consumers Association published a study that confirmed that the income tax cuts already eroded by interest rate hikes and the steady drip-feed of price increases will leave ordinary families, the poor, single parents and the elderly worse off. The only winners from the GST will be people on incomes well above average weekly earnings.

The Chief Minister has often claimed the credit for the Territory's economic success. She has the penchant for grabbing the economic indicators as they emerge and trumpeting their positive impact on the local economy. Small business and the growth of the private sector are favoured topics when the Chief Minister talks up the local economy, but these are the very sectors that will be hard hit by the GST. I think some of the small business community around Canberra will be very interested when I send them Mr Hird's speech and they get some feeling for what Mr Hird thinks about the impact of a GST and his complete disregard for the impact of a GST on businesses out in Belconnen.

The New South Wales Department of State and Regional Development recently commissioned a study on the impact of the goods and services tax on small business. Mr Hird obviously has not read it. The case studies examined by Ernst and Young make interesting reading, Mr Hird. These were not uncommon businesses - a jewellery retailer, a small manufacturer with export markets, a smash repairer, a business that installs and repairs air-conditioning. Any of these businesses could be operating in the ACT.

Each of the businesses had a high general level of awareness of the new tax regime. Each recognised that the financial and time costs of GST implementation would be considerable. Most had already commenced preparations to implement the GST. The Ernst and Young study found, in relation to implementing the GST, that the estimated costs incurred up to 1 July ranged from $9,750 to $19,930. They are those small business constituents of yours out there in Belconnen, Mr Hird. All business will have to commit time and training to implementation. These are hours of business forgone, and the nature of small business means that owners will typically have to spend some of their own time, after hours, in grappling with GST implementation issues.

The extent of implementation costs will obviously vary with the nature of the business. But all businesses face common costs: Initial contract reviews; general start up and compliance costs; price tag ticket amendments; computer software upgrades and testing; point of sale register upgrades; advertising and brochure replacements; design, test and issue of GST tax invoices; and outside technical training. I am sure struggling small businesses of the ACT will thank and embrace the Liberal Party for their support of that extra burden.

Beyond the implementation stage, small business will face further costs. Studies taken overseas show an unmistakable fact - that the ongoing compliance costs of the GST will be greatest for small business. This is a tax regime that makes small business the taxman.

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