AS STATE and territory leaders gather at Sydney’s Victoria Barracks with Prime Minister Tony Abbott, many Valley residents are concerned by NSW Premier Mike Baird’s proposed 50 per cent increase to the Goods and Services Tax (GST).
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Mr Baird has said he supports a rise in the tax from 10 per cent to 15 per cent to fund the state’s health care system, with households earning less than $100,000 to be compensated.
The Premier’s stance indicates the states and territories did not have enough money to fund schools and hospitals before Joe Hockey’s federal budget cuts of $80billion from state governments over the next decade.
So how do local residents and business owners feel about the premier’s proposal?
“They [the politicians] are going to do what they want and I think it will go up,” Bega resident Diane Grimes said.
“There will be uproar like the time it was first brought in, but it still went through that time and there was nothing we could do about it.” Principle of Office Choice in Bega, Judy Hannam, said the biggest problem with the proposal is the effect it will have on lower and middle income earners, although she did feel that taxation reform was an important topic of discussion.
“I heard it will cost up to nine per cent of people’s disposable income, which was based on earning $1000 a week and who earns that around here?” Ms Hannam said.
“I definitely think something must change if we are going to remain the good country.
“The problem is politicians give themselves raises and they have a great super amount and a pension for the rest of their lives,” she said.
Partner in Magpie Music Keith Broomfield said that applying the GST to online purchases would be a better solution and that small businesses in the region such as his would be negatively impacted by an increase to GST.
“Business will suffer especially small business,” Mr Broomfield said.
“We won’t be able to absorb the [additional] five per cent so we’ll have to put it onto the customers.
“The impost on all people rich and poor will affect the poorest people and in the Bega Valley we have many people living on or below the poverty line.
“Businesses have been asking for six or seven years now to impose a GST on online purchases under $100, and it is something that would really help.
“It’s not a level playing field at the moment,” he said.
Ms Grimes and Mr Broomfield were not alone in thinking the proposal could put them out of business.
“It’s going to hurt small businesses because people will think we’re charging them more,” owner of Fletcher’s Fotographics Robert Hayson said.
“Normal people out there will be thinking they are paying more for their goods.”
Bega Health Foods’ Chris Phillipps said the tax is regressive and also felt it would affect the poorest people in the region.
“Governments like pay as you go and the GST because you can’t escape them,” Mr Phillipps said.
“I don’t mind the idea of collecting more tax, but will they hit the corporates and the bigger companies?”
Mr Phillipps said it would be unlikely that any side of politics would take a policy to increase the GST into an election campaign, as it would most likely not be supported by voters.
