19 June 2000
COUNTDOWN TO A NEW TAX SYSTEM
It’s only 11 days to the much publicised change-over of our tax system and you may have noticed that the media coverage, as well as criticism by the Opposition, is becoming intense. I still believe it will be just like the Y2K bug and within a few weeks almost everybody will be at home with the new system.
It just happens that 30 June is a Friday and there is little doubt that many businesses will close for good. These will be businesses that have depended heavily on cash to get by, or ones that are only marginally profitable or ones where the proprietors are older people who have been operating as sole traders or small partnerships and who would have retired in the next few years anyway.
The other side of the coin is that this an exciting time for efficient growing businesses, as both their costs and their paperwork will be reduced. Also, the business activity statement, which will be forwarded to the government quarterly by smaller businesses and monthly by bigger businesses, will give Treasury for the first time an accurate and timely overview of what is happening in the economy.
Keep in mind that before the introduction of GST, which was so opposed by Labor and the Democrats, the personal tax rates were :
0 – $5100 zero
$5101 – $12,600 24%
$12,601 – $19,500 29%
$35,001 and over 49%