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GST delay fears fuel channel revolt

GST delay fears fuel channel revolt

Prompted by rumours the GST could be delayed by several months, the Australian Information Industry Association (AIIA) is spearheading a push to lobby the Federal Government for clarity and consistency on the new tax.

The channel is already suffering a downturn in sales with customers anticipating lower, post-GST prices for computer hardware, and there are fears prolonging the uncertainty could see some resellers go under.

"Already resellers in IT&T equipment and software are experiencing a downturn in sales - a bit like the car industry," said Michel Hedley from the AIIA.

"A delay would continue that impact of reduced sales in the face of customer uncertainty. We're anxious that Government and Parliament proceed as fast as possible in firming up the deal. Delays are bad for business."

A spokesperson from the Australian Tax Office told ARN the GST would be implemented as planned on July 1, but suggested there would be a period of "leniency" for businesses to get their systems in place.

"There's no likelihood of the GST being delayed, full stop," the spokesperson insisted. "The GST will be implemented on July 1. The legislation is through and was passed some time ago."

The bulk of the GST legis-lation has been passed by Parliament, but some details have yet to be finalised, and the industry is concerned the uncertainty could lead to a delay. "The final legislation is not through yet and the longer it goes on, the more worried people get. We want to stick to the timetable [of July 1] that the Government has always proposed," Hedley said.

Marnie King, international business development manager for accounting software company Solomon Software, said she had heard rumours of a GST delay "around the traps".

"It's just a rumour because it's not completed yet," King said. "The legislation is not finalised and it probably won't be finalised until late in the year. The GST was delayed in New Zealand for exactly that reason."

Frank Colli, managing director of Hewlett-Packard dealer Leading Solutions, said there has been a downturn in sales of 20 to 30 per cent since Christmas, which is having a huge impact in an industry already scraping by on minimal margins.

"Some resellers are hurting, others are dealing with it," Colli said. "For Leading Solutions, while it's not the most wonderful thing in the world, we can cope. But there are some out there that are bleeding quite badly and they can't afford the downturn. You'd be surprised how many," he said.

Colli said the downturn was focused on hardware sales, and mainly concentrated in the corporate market, whereas the consumer market is strong, and education and government remain steady.

Tony Iannuzzelli, managing director of integrator and reseller Vertex Technology, said savvy customers were asking lots of questions and deciding to buy later. "We have received numerous requests to provide estimates of the savings that will be obtained after the GST is introduced. Customers are not specifically saying that they are not going to buy, but the fact that they are asking shows that it is influencing their buying decisions."

Iannuzzelli added: "I haven't heard of any delays in the GST. We and our customers are working towards the July 1 deadline. Any postponement would be disastrous for those relying purely on hardware. It creates an element of confusion which makes it more difficult for resellers in terms of business planning and cashflow."

Stephen Wong, managing director of Queensland assembler and hardware wholesaler Able Systems Development, confirmed that he and his resellers are hurting as small-to-medium companies hold off computer purchases until after the start of the GST. As far as he is concerned it is "the sooner the better" in relation to introducing the new tax and any further delay would have significant negative impacts on his resellers.

"One day you are hearing this and the next day you are hearing that," Wong said. "There is a lot of confusion. I will be glad when it is all over so that we can start to get used to it and return to a proper focus."


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