The GST (Goods and Services Tax) is a value added tax of 10% on most goods and services sold in Australia. Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Value added tax (VAT), or goods and services tax (GST), is...

It was introduced by the Howard Government on 1 July 2000, replacing the previous federal wholesale sales tax system and designed to phase out the various state and territory taxes such as banking taxes, stamp duty and land value tax. John Winston Howard (born 26 July 1939) is an Australian politician and the 25th Prime Minister of Australia. ... is the 182nd day of the year (183rd in leap years) in the Gregorian calendar. ... 2000 (MM) was a leap year starting on Saturday of the Gregorian calendar. ... A sales tax is a consumption tax charged at the point of purchase for certain goods and services. ... Stamp duty is a form of tax that is levied on documents. ... Land value taxation (LVT), or site value taxation, is the policy of raising state revenues by charging each landholder a portion of the value of a site or parcel of land that would exist even if that site had no improvements. ...

Introduction of the GST

The idea for a broad-based consumption tax was first proposed by Paul Keating at the 1985 Tax Summit but was dropped at the behest of then Labor Prime Minister Bob Hawke after pressure from the ACTU, welfare groups and business, which did not like its association with proposals for capital gains and fringe benefits taxes. For other persons named Paul Keating, see Paul Keating (disambiguation). ... Robert James Lee (Bob) Hawke, AC (born 9 December 1929) is a former Australian trade union leader turned politician who became the 23rd Prime Minister of Australia. ... The Australian Council of Trade Unions (ACTU) is the peak national body representing workers in Australia. ... A capital gains tax (abbreviated: CGT) is a tax charged on capital gains, the profit realized on the sale of an asset that was purchased at a lower price. ...

The idea was refloated in 1991 by the opposition Liberal-National Coalition, and was the centrepiece of the opposition's Fightback! platform at the 1993 election, ironically when Keating was Prime Minister. However the opposition had difficulty explaining the policy, as illustrated in leader John Hewson's infamous Birthday Cake Interview, and Keating's campaign exploited public distrust of the GST. The GST was seen as the main reason for the opposition's surprise election loss of the 'unloseable election' in 1993. The Coalition in Australian politics refers to the grouping of two political parties that has existed in the form of a coalition agreement since 1922, with only brief breaks (e. ... Legislative elections were held in Australia on March 13, 1993. ... Dr John Hewson Dr John Robert Hewson (born 28 October 1946), Australian Liberal politician and economist, was born in Sydney, New South Wales, the son of a working-class, politically conservative engineer. ... The Birthday Cake Interview refers to a famous political interview in Australia that was carried out between interviewer Mike Willesee and Liberal Party Opposition Leader Dr John Hewson shortly before the 1993 federal election. ...

John Howard was re-elected leader of the Liberal party in 1995. 25 August 2004</ref> Howard subsequently led the Liberal-National Coalition to a large victory in the 1996 elections. John Winston Howard (born 26 July 1939) is an Australian politician and the 25th Prime Minister of Australia. ... is the 237th day of the year (238th in leap years) in the Gregorian calendar. ... Year 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ... Legislative elections were held in Australia on 2 March 1996. ...

In the lead-up to the 1998 election, Howard campaigned on the GST, with the GST replacing all former sales taxes, as well as applying to all goods and services. Howard narrowly won the election, describing the victory as a "mandate for the GST". Lacking a Senate majority, and with Labor adamantly opposed to the introduction of the GST, the government turned to the minor parties for support. Legislative elections were held in Australia on 3 October 1998. ... A sales tax is a consumption tax charged at the point of purchase for certain goods and services. ... Australian Senate chamber Entrance to the Senate The Senate is the upper of the two houses of the Parliament of Australia. ...

A prominent selling point of the legislation was that every dollar collected from the GST would be redistributed to the states. As such, an agreement was enacted with the state and territory governments of Australia in 1999 that their various duties, levies and taxes on consumption would be removed gradually over time, with the budget shortfall being replaced by GST income from the Commonwealth Grants Commission. Furthermore, personal income tax and company tax was reduced to offset the GST.

During the 1998 election campaign, the Democrats leader Meg Lees stated that they were opposed to the GST unless food, books and tourism packages sold offshore were exempt and other tax measures were implemented.^[1] The government initially stated that these exemptions were not possible, and looked more likely to win a compromise with independend Senator Brian Harradine, but eventually a compromise was reached with Lees, including most basic food items being exempt from the GST, library purchases of books being refunded the GST, a temporary 8% refund on school textbooks, increases to welfare payments. and greater powers to the ACCC. The legislation was passed on June 28, 1999 as A New Tax System (Goods and Services Tax) Act 1999. It gained assent on 8 July 1999 and came into operation on 1 July 2000. The Australian Democrats, who are often known simply as The Democrats in Australia, are a progressive social liberal party. ... Meg Lees Meg Heather Lees (born October 19, 1948) has been the founder and sole representative of the Australian Progressive Alliance in the Australian Senate since 2003, representing the state of South Australia. ... Brian Harradine (born January 9, Australian politician, has been an independent member of the Australian Senate since 1975, representing the state of Tasmania. ... The ACCC Logo The Australian Competition and Consumer Commission (ACCC) is an independent Australian commonwealth government authority established in 1995 from the amalgamation of the Australian Trade Practices Commission (TPC) and the Prices Surveillance Authority, to protect consumer rights, business rights and obligations, perform industry regulation and price monitoring and... is the 179th day of the year (180th in leap years) in the Gregorian calendar. ... Year 1999 (MCMXCIX) was a common year starting on Friday (link will display full 1999 Gregorian calendar). ... is the 189th day of the year (190th in leap years) in the Gregorian calendar. ... Year 1999 (MCMXCIX) was a common year starting on Friday (link will display full 1999 Gregorian calendar). ... is the 182nd day of the year (183rd in leap years) in the Gregorian calendar. ... 2000 (MM) was a leap year starting on Saturday of the Gregorian calendar. ...

Political fallout

Meg Lees viewed the dilution of the GST legislation as a success, but the issue split the Democrats, with Senators Natasha Stott Despoja and Andrew Bartlett crossing the floor to vote against the GST. The move triggered infighting amongst the Democrats, and while the Democrats performed reasonably well in the 2001 federal election, the infighting worsened, resulting in the loss, at the 2004 federal election, of the balance of power they once held in the Senate. Natasha Stott Despoja Natasha Jessica Stott Despoja (born 9 September 1969), Australian politician, has been an Australian Democrats member of the Australian Senate for South Australia since November 1995. ... Bartlett speaks at the launch of his campaign for re-election to the Australian Senate in July 2007 Andrew John Julian Bartlett (born 4 August 1964), Australian politician, has been a member of the Australian Senate for the state of Queensland since 1997, representing the Australian Democrats, of which he... In politics, crossing the floor is to vote against party lines, especially where this is considered unusual or controversial. ... Legislative elections were held in Australia on 10 November 2001. ... Legislative elections were held in Australia on 9 October 2004. ...

Australian Labor Party leader Kim Beazley still believed the tax was unpopular with the Australian public, and continued to oppose it during the government's second term. During the 2001 election campaign, Labor made the touted 'GST rollback' a centrepiece of its election platform. Labor attempted to reprise the effects of the birthday cake interview by deriding the application of GST to cooked and uncooked chickens, but failed to ignite public passion because the true extent of the proposed rollbacks were revealed to be relatively modest; applying only to gas and electricity bills. Labor lost the election, effectively ending all serious opposition to the GST. For Kim Beazleys father, Kim Beazley senior, see Kim Edward Beazley. ... Legislative elections were held in Australia on 10 November 2001. ...

However, in early 2006, the GST returned to frontpage headlines when the New South Wales (NSW) State Government and the Federal Treasurer Peter Costello launched adversarial advertising campaigns concerning distribution of the GST to the states. NSW Treasurer, Michael Costa argued in full-page newspaper advertisements and on televised commercials that NSW consumers paid AUD$13 billion in GST but received only AUD$10 billion back from the Commonwealth Grants Commission, and as such he said that NSW was subsidising resource rich states like Queensland and Western Australia. The Federal Government counteracted with its own advertising campaign which claimed that NSW had breached its contractual obligations under the 1999 GST Agreement by continuing to charge unfair stamp duties and land taxes, which were supposed to have been abolished. After weeks of intense media and public pressure, the NSW State Government announced in its Budget that it would reduce stamp duty and land tax; however critics argued that the Government did not go far enough with much broader tax reform in NSW required to help encourage investment and business that had been forced elsewhere due to an unfavourable NSW business environment. This was in response to the Commonwealth allowing another AUD$72 million in grants to NSW, in addition to existing annual increases.^[2] Capital Sydney Government Constitutional monarchy Governor Professor Marie Bashir Premier Morris Iemma (ALP) Federal representation  - House seats 50  - Senate seats 12 Gross State Product (2004-05)  - Product ($m)  $305,437 (1st)  - Product per capita  $45,153/person (4th) Population (End of March 2006)  - Population  6,817,100 (1st)  - Density  8. ... Peter Howard Costello (born 14 August 1957), Australian politician, has been Deputy Leader of the Liberal Party since 1994, and Treasurer in the Australian government since 1996. ... Michael Costa (born 15 July 1956) is an Australian politician. ... Capital Brisbane Government Constitutional monarchy Governor Quentin Bryce Premier Peter Beattie (ALP) Federal representation  - House seats 28  - Senate seats 12 Gross State Product (2004-05)  - Product ($m)  $158,506 (3rd)  - Product per capita  $40,170/person (6th) Population (End of November 2006)  - Population  4,164,590 (3rd)  - Density  2. ... Slogan or Nickname: Wildflower State or the Golden State Other Australian states and territories Capital Perth Government Constitutional monarchy Governor Ken Michael Premier Alan Carpenter (ALP) Federal representation  - House seats 15  - Senate seats 12 Gross State Product (2004-05)  - Product ($m)  $100,900 (4th)  - Product per capita  $50,355/person...

Economic and Social Effects of the GST

Many critics have argued that the GST is similar to a regressive tax, which has a more pronounced effect on lower income earners, meaning that the tax consumes a higher proportion of their income, compared to those earning large incomes. However, these claims are somewhat mitigated due to the corresponding reductions in personal income taxes, state banking taxes, federal wholesales tax and some fuel taxes that were implemented when the GST was introduced. Thus, according to the Federal Treasurer, Peter Costello, people were effectively paying no extra tax.^[3]

The preceding months before the GST became active saw a spike in consumption as consumers rushed to purchase goods that they perceived would be substantially more expensive with the GST. Once the tax came into effect however, there was plummeting consumer consumption and economic growth, that by the first fiscal quarter of 2001, the Australian economy plunged into negative growth for the first time in more than 10 years.^[4] Consumption soon returned to normal however. The Government was also criticised by small business owners on the grounds that administrative costs and red-tape had soared as businesses had to submit Business Activity Statements regularly to the Australian Taxation Office, in addition to having to pay one-eleventh of revenue for GST purposes.^[5] The sheer number of businesses applying for Australian Business Numbers (ABNs) exceeded expectations and was indicative of the effect of the GST in forcing businesses out of the cash economy and into paying tax.^{[citation needed]} The Business Activity Statement (BAS) is a form submitted to the Australian Taxation Office by businesses who are registered to pay Goods and Services Tax (GST). ... The Australian Taxation Office (ATO) is the Australian government agency that collects taxes and enforces taxation legislation (except customs and external revenues, which are handled by the Australian Customs Service). ...

A study commissioned by the Curtin University of Technology, Sydney in 2000, argued that the introduction of the GST would negatively impact the real estate market as it would add up to 8 percent to the cost of new homes and reduce demand by about 12 percent.^[6] These claims may have been accurate during the early GST period, however the real estate market returned to unprecedented boom between 2002 and 2004 where property prices and demand increased dramatically, particularly in Sydney and Melbourne. During the 2004-2006 period Perth has also witnessed a sharp climb in real estate prices and demand. This article or section does not cite any references or sources. ... The Sydney Opera House on Sydney Harbour Sydney (pronounced ) is the most populous city in Australia, with a metropolitan area population of approximately 4. ... The Sydney Opera House on Sydney Harbour Sydney (pronounced ) is the most populous city in Australia, with a metropolitan area population of approximately 4. ... Melbourne (pronounced ) is the second most populous city in Australia, with a metropolitan area population of approximately 3. ... The Perth skyline viewed from the Swan River This article is about the metropolitan area of Perth, Western Australia. ...

Tourist Refund Scheme

The removal of import duties has led to a change in discounts available when duty free shopping and the process for claiming tax savings. Previously goods could be purchased from suppliers offering duty free pricing upon presentation of a current passport and airline tickets. The goods would then remain sealed until the passenger had passed through the customs area at an airport.

Following the introduction of the GST, a receipt for goods with a combined total over AUD$300 is eligible for a refund of any GST paid upon exiting the country with refunds claimed at a TRS (Tourist Refund Scheme) counter at the airport. The advantage of this arrangement is that goods purchased up to a month prior to departure may be freely used within Australia prior departure as long as they are carried in hand luggage and presented when making a refund claim. This obviously does not extend to consumable goods such as food and beverages.

References

is the 140th day of the year (141st in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday (link displays full 2006 calendar) of the Gregorian calendar. ... is the 140th day of the year (141st in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday (link displays full 2006 calendar) of the Gregorian calendar. ... is the 140th day of the year (141st in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday (link displays full 2006 calendar) of the Gregorian calendar. ... is the 140th day of the year (141st in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday (link displays full 2006 calendar) of the Gregorian calendar. ... May 21 is the 141st day of the year (142nd in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday (link displays full 2006 calendar) of the Gregorian calendar. ...

External links

• The legislation: A New Tax System (Goods and Services Tax) Act 1999
• Australian Tax Office