Looking back on GST and its introduction I would love to report that as a result of having to lodge quarterly Business Activity Statements the community of small businesses is now so switched on that all have now established a more profitable business because of better information flow that is delivered at a more appropriate time.

GST unfortunately produced hundreds of thousands of extra “contractors” in Australia. These are the former employees who have been put off the payroll and immediately rehired under contract. A distressing number of them are in deep trouble with the Tax Office because they have forgotten that one eleventh of their takings belongs to the Tax Office……..and they have spent it, along with the tax that they also have to pay on the profits they have made from their own labour.

If you are a contractor being paid in full for the work you do it is absolutely essential to remember at all times that all the money you get does not belong to you. “Paid in full” means complete with GST and the money that you receive from your own labour.

The glowing claims that Mr Costello made about how GST would wipe out the cash economy have been proven as a futile wish but it is certainly more difficult for crooks to prosper within respectable industries. I do not think that too many crooks did prosper in respectable industries in the past either.