BBQING GOING UP 10%. GST ON FRESH PRODUCE.

[henry]

Hi there,

I do not want this discussion to start into a Liberal Vs Labor, whose fault it is on the budget blah blah blah etc etc etc.

But this is something i feel strongly about party politics aside. I feel that we as a community of cooks should band together to stop this from happening.

http://www.smh.com.au/federal-politics/ ... 38k88.html

They say out there that this change is in the pipeline, that all fresh produce is in line to be taxable. I can't speak for many of you but i tend to shop at the Green Grocer, Butcher and the Bakery. I tend to shun the big supermarkets for purchases of cheese, yoghurt and household stuff.

This effectively would make our produce more expensive and put pressure on producers to maintain costs.

Aside from that, if we went out for a meal the bill just got 10% more expensive too!

Are you opposed to these changes? What do you suggest we do?

[Dave]

I agree, lets leave party politics out of this.

Like you Henry I also shop at the Green Grocer, Butcher and the Bakery & only shop at the big supermarkets for the other items.

Unfortunately we are massively in the Red & need to get back into the black for the country's sake, so perhaps we need to look at the bigger picture here........

Most restaurants & Pubs etc work on one third food cost, one third labour & one third profit so we shouldn't see these bills increase by much more than 3% I wouldn't have thought.

Where it will affect us all the most is the fresh produce we purchase for our home cooks.

I am personally all for getting us back into the Black & out of the Red, but the problem when a new tax is introduced, once it has done its job it is hardly ever removed, see Payroll Tax that was introduced in the war, so ridiculous that today it is still in, such a non incentive for businesses in Australia to grow past a certain size.

Just my thoughts here

Cheers, Dave

[henry]

Sure thing Dave, agreed on your thoughts on the tax. I'd hate to see it introduced and then not removed.

I feel that the essentials should not be taxed ever.

In the case of businesses i'm sure they would appreciate not having to have to fork out an extra 10% in cashflow so as in such time to undertake their BAS statement.

The only increase of tax on fresh produce i could support would be on Imported product. I'd be interested to see how the supermarkets get around that.


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[urbangriller]

Sorry, but the net effect for a food business of adding the GST to fresh food is a HUGE SAVING!

Any GST paid is claimed back when the food is sold!

I currently make a salad sandwich and charge you $4.50 including $0.41 GST, if the salad had GST. I pay GST on the Bread, Margarine and Mayo etc as well as power, insurance etc, if I paid GST on the salad, I’d pay more for the ingredients, but I'd simply claim it back……..There would be no change in the profit.

But the nightmare of working out my BAS would be gone! Hours of Admin time saved! Every input would have GST and it’d be easy to claim it back. Now GST is on some inputs but not others, it’s an admin nightmare (thanks Meg!). This extra admin is a huge impost on the cost of running a food business.

Here is an example from one supplier:
Plain Milk, No GST
Flavoured Milk GST
Juice, No GST
Juice with added vitamins GST
Water No GST
Sparkling water GST

Sorting this out product by product takes hours every week.

Having the GST applied evenly has no net effect on the final price of the item, but it does increase the time spent and the accountants bill.

It will cost the housewife more at the checkout though.

Chris

[chriso]

But we're not massively in the red.
Compare Australia to other first world countries
http://en.m.wikipedia.org/wiki/List_of_ ... ublic_debt

Our debt as a percentage of our GDP is way less than the US, UK and many "rich" European countries.

[edgy]

Couldn't agree more Dave, we need to be out of the red.

I guess it is a small price to pay in the grand scheme of things... but as to dining out going up 10%, that doesn't calculate, most businesses would claim ITC's.

basic math

No tax on produce
$10 x 3 = $30 + GST = $33 No input tax credit claimable by business, the business pays $3.00 to the government.

Taxed produce
$10 x 3 = $30 + gst = $33.00 inc GST. the business can claim the ITC of $1, so effectively the output tax is $2, the government stills takes $3.00

Now that is not exactly how it would all go down obviously as their is other transactions on the businesses ledger that will effect their payable taxes but we should not be paying more to dine out, if any business uses that as an excuse to jack up their prices then that is wrong.

It'll be us as consumers that will be paying more for fresh produce...

[edgy]

Sorry, but the net effect for a food business of adding the GST to fresh food is a HUGE SAVING!

Any GST paid is claimed back when the food is sold!

I currently make a salad sandwich and charge you $4.50 including $0.41 GST, if the salad had GST. I pay GST on the Bread, Margarine and Mayo etc as well as power, insurance etc, if I paid GST on the salad, I’d pay more for the ingredients, but I'd simply claim it back……..There would be no change in the profit.

But the nightmare of working out my BAS would be gone! Hours of Admin time saved! Every input would have GST and it’d be easy to claim it back. Now GST is on some inputs but not others, it’s an admin nightmare (thanks Meg!). This extra admin is a huge impost on the cost of running a food business.

Here is an example from one supplier:
Plain Milk, No GST
Flavoured Milk GST
Juice, No GST
Juice with added vitamins GST
Water No GST
Sparkling water GST

Sorting this out product by product takes hours every week.

Having the GST applied evenly has no net effect on the final price of the item, but it does increase the time spent and the accountants bill.

It will cost the housewife more at the checkout though.

Chris

agree mate, spot on.... you beat me to the punch!

Depending on your accounting software package it shouldn't be that hard to manage your GST ^^ because it isn't

[urbangriller]

Couldn't agree more Dave, we need to be out of the red.

I guess it is a small price to pay in the grand scheme of things... but as to dining out going up 10%, that doesn't calculate, most businesses would claim ITC's.

basic math

No tax on produce
$10 x 3 = $30 + GST = $33 No input tax credit claimable by business, the business pays $3.00 to the government.

Taxed produce
$10 x 3 = $30 + gst = $33.00 inc GST. the business can claim the ITC of $1, so effectively the output tax is $2, the government stills takes $3.00

Now that is not exactly how it would all go down obviously as their is other transactions on the businesses ledger that will effect their payable taxes but we should not be paying more to dine out, if any business uses that as an excuse to jack up their prices then that is wrong.

It'll be us as consumers that will be paying more for fresh produce...

In fact manufactured food could become cheaper without the added cost of complience.

At the moment we need to itemise every invoice to work out the input GST, if I could simply divide my costs by eleven to get to the input GST, I’d get back the weekend, every weekend!

Chris

[Dave]

But we're not massively in the red.
Compare Australia to other first world countries
http://en.m.wikipedia.org/wiki/List_of_ ... ublic_debt

Our debt as a percentage of our GDP is way less than the US, UK and many "rich" European countries.

Im more concerned about Australia, compared with being in the Black, we are very much in the Red, hence the latest Budget.

Sorting this out product by product takes hours every week.

Having the GST applied evenly has no net effect on the final price of the item, but it does increase the time spent and the accountants bill.

It will cost the housewife more at the checkout though.

Chris

I agree Chris, although I think its harder for the small guys also.

Cheers, Dave

[LA1]

But we're not massively in the red.
Compare Australia to other first world countries
http://en.m.wikipedia.org/wiki/List_of_ ... ublic_debt

Our debt as a percentage of our GDP is way less than the US, UK and many "rich" European countries.

The problem is the income part(or lack thereof) and the debt growth unless it is sorted out.

[henry]

Putting side business interests as a consumer i'm surprised that there is support for making groceries more expensive. It effectively means unless you live on a farm, grow your own vegies and cattle you cant avoid paying a tax. Thats ridiculous, i already have to pay tax on the electricity, wood for my barbie. Now i cant even buy the ingredients to make beer. How is that fair?


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[Smokey]

We are all consumers and will pay, The quandary you have is that most of the replies you have are from business owners.
It's one thing to want cheap goods on the shelves and it's another thing to want an economy to run a business and pay wages.
LA1 has it right, Our dept is relatively low compared world wide but the RATE of dept growth is right up there with the highest.
I has to be pulled back somehow.

I hate talking politics and religion among friends, It never turns out good as most people are mind set.
So I'll just back out of here whistling nervously

[Dave]

We are all consumers and will pay, The quandary you have is that most of the replies you have are from business owners.
It's one thing to want cheap goods on the shelves and it's another thing to want an economy to run a business and pay wages.
LA1 has it right, Our dept is relatively low compared world wide but the RATE of dept growth is right up there with the highest.
I has to be pulled back somehow.

Business Owners are people too, not really sure why the quandary here?

Anyway, I completely agree with the rest Mick.

Cheers, Dave

[Smokey]

Henry's Quandary, He can't believe some would want to pay more.

[Gumb]

Sorry people but we are here to talk BBQ and this has the potential to get way out of hand. If you wish to discuss government policy and associated politics, there are other avenues for that.
Topic moved from General to the Tin Shed.