Industry has their say on GST
- 19 August, 1998 13:52
"It's hard to comment at this early stage, but it could be very bad news for outsourcing opportunities. Any major company considering outsourcing its application development could be up for increased costs."
Bob Burns, managing director, BCC Advertising Systems"Services, which is a high-margin area and is currently not taxed, could present a downside because that is where most are getting their margins from. Not lowering the top tax rate does nothing to help Australia attract skilled workers."
Bruce McCabe, senior industry analyst, Gartner Group"We're likely to see a decrease in the cost of PC components as the 22 per cent wholesale tax will be reduced to 10 per cent. That will presumably stimulate demand from end users who will also have more change in their pockets flowing through from the tax cuts. "There may well, however, be a slow-down three to four months immediately after the tax is introduced."
Graeme Penn, general manager of research, IDC"I think it will boil down to the consumer and how much they want to spend."
Alex Vassallo, manager of Meghead
"For business, the issue will be the collection of the GST and how that fits around them. The very small end are protected in that if they have under $250,000 in turnover, they can elect to tend their GST on a cash basis."
Greg Hayes, small business spokesperson, Australian Society of CPAs"As an assembler, I believe it will be very good for the IT industry, providing a level playing field by making it more difficult for small businesses to evade sales tax. Avoiding wholesale sales tax on components will be more difficult."
Peter Lai, vice president Asia-Pacific, Edge Computers"There may be an inflationary effect initially, but in Canada and New Zealand, that was temporary and caused by artificial price increases. We've got two years to sort it out.
"While the proposed plan is for the GST to be paid every quarter instead of current sales tax paid every month, this could represent a real improvement in cash flow."
Maree Lowe, director Anabelle Bits
"We have stores in New Zealand, and as a result of the introduction of the GST, the issues of sales tax fraud are nowhere near as severe. The GST will not eliminate fraud, but it will make it harder to abuse, and should cut out those resellers who seem to operate outside the tax net."
Tony Gattari, Harvey Norman general manager, computers and communications"From a developer's point of view, any extra cost generated by a GST would be passed on to the end user.
"Developers operating in the $100,000 product range may have more capacity to negotiate prices than those developing and selling packages up to, say, $500.
"The lower price end of the market may be more price sensitive."
Chris Yeoh, managing director, Illumin8 (software developer)"We wouldn't revise our budgets up or down. I think it will have a very minimal impact, especially in networking, communications and e-commerce, which is such a strategic way for companies to derive cost savings."
David Shein, managing director, Com Tech"If the GST means we can compete more fairly with retailers who seem to lose the sales tax component of their systems, it could be a good thing. If I have to employ any extra staff to administer the new tax system, the benefit to my business may be lost."
Tony Prince, managing director, comPlus Computers"The upside is once and for all the Government will be cleaning up this industry."
Ross Whitelaw, general manager of Leading Edge Computers"This will be the final nail in the coffin for tax cheats and will eliminate the black economy."
Ron Harris, managing director, Harris Technology"We're unsure what the impact will be on the service component of our business, which is the most critical area for us."
Johnathon Fisk, CEO, Senteq