GST cost 'almost unimaginable': Deloittes

The cost to organisations of tailoring their systems to meet the demands of a food-free GST is "almost unimaginable", according to a leading consulting organisation.

Jim Morrison, IT tax partner at Deloitte Touche Tohmatsu, said it has been attempting to put a dollar figure on the exact financial burden placed on Australian businesses as they struggle to re-jig their technological infrastructure in the face of the federal government's new-look GST. But after several weeks of searching for an answer, he said Deloitte's has realised the cost is almost too high to calculate.

"We couldn't even have a guess [at a figure]," he said. "How can we possibly estimate what the cost is going to be to all the enterprises around Australia? From what we can gather from what we've looked at, the cost is almost unimaginable."

While Federal Treasurer Peter Costello recently slapped a $100 million price tag on the cost to business of supporting the food-free, broad-based tax regime, Morrison said that figure is merely the tip of the iceberg. Taking into account the recurring charges of continual system enhancements as new products enter the market, he said the total cost may spiral out of control - especially for cash-strapped, medium-sized companies.

"I don't think Costello's $100 million figure is outrageous, I think it's conservative. I think that $100 million is just for people to get set up. But I think ongoing, it will probably be half that every single year while people come to grips with the complications that will arise from it.

"It is going to mean a financial burden and a lot of time and effort on [the user's] part to tie the whole thing down. I think people are only now just starting to realise how much of a complication has been made by pulling food out. It's just getting bigger and bigger, sillier and sillier, and more expensive," Morrison said.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about DeloittesDeloitte Touche TohmatsuDeloitte Touche Tohmatsu

Show Comments