effect of GST on Australian economy (1 Viewer)

[Dumbarse]

Hey can anyone tell me what the impact of the GST was on the Australian economy?
relating it to the aggregate demand- aggregate supply model??!
thanx

 

[-=«MÄLÅÇhïtÊ»=-]

Gst created a 1 off increase in inflation. inflation decreases demand.

the revenue from gst goes to state government. so it doesnt do much in terms of affecting federal gov revenue


in terms of supply. small businesses started using computer accounting systems such as MYOB because of the gst. So instead of using a periodic inventory system, some decided to switched to a perpetual inventory system. This gave accurate data for decision makers. Businesses are better able to find places to cut down on costs. Thus making their good more competitive. On the other hand, the cost of implementing a computer accg system and training of employees also increased costs.

*shrugs*

 

[Bambul]

The GST is a growth tax, so it grows as the economy grows (or shrinks if it happens to do so). It also broadens the tax base (which is a techy way of saying that the government is receiving tax revenue from different sources as opposed to taxing a few sources heavily - like personal income tax). It's an indirect tax, that means it can be passed on to consumers, and almost universally applied as a value added tax (eg. food and health are excluded).