the party is over, time for austerity measures for many of us and a return to budget holidays and food

Written by Gary on March 19th, 2016

Many of us in Australia who work for not-for-profit organisations have enjoyed a quirk in the taxation laws which allowed us to effectively purchase gourmet meals and better than usual accommodation and holiday packages on pre-tax income via salary packaging which has made these luxuries more affordable by giving an effective discount of 30-45% – but come 1st April 2016, this will essentially end.

This quirk in the tax laws was introduced by PM Howard around 2001 after he had introduced the much feared 10% Goods and Services Tax (GST), as a measure to not only help restrain pay rises for the public sector employees who had few opportunities to avoid the high income tax rates (unlike the self employed and many private businesses who not only had a substantial non-taxed “cash” economy but far more opportunities for tax deductions), and at the same time help to buffer the impact of the new GST on the already struggling hospitality and tourism industries.

Last year the Australian Liberal govt decided this was one area where they could increase tax income for the government and it was one of the few measures that the hostile senate where happy to pass, and thus comes to an end (although it still exists but at such a low capped benefit that it may as well be non-existent) a much loved “benefit” and an effective reduction in disposable income which has already been impacted by rising living costs, increasing super taxes, a dramatically lower Australian dollar exchange rate, and rather stagnant or even falling incomes, not helped by a rather sluggish stock market, and very real potential for negative gearing of investment property to be curtailed.

The result for many of us means access to some of the luxuries in life has been severely curtailed, and for me, it is partly the reason I have taken up the camping option and local travel within Australia with renewed vigor.

I do feel sorry for the hospitality industry, particularly local restaurants, B&Bs and hotels who will be impacted, and possibly the tourism industry as a whole although the low Australian dollar should encourage overseas tourists to come to Australia.

Meanwhile those of us who enjoyed eating the more expensive higher quality health foods will now tend to resort back to poor quality, high calorie fast foods – another reason to go camping and hiking to burn off this bariatric-inducing “cost-saving measure”.

Governments in their haste are well known for introducing new laws and processes without sufficient thought and measures to avoid unintended consequences whether they be excess use of otherwise good laws such as this one was (many employees were able to package exorbitant weddings), or unproductive wasteful spending such as those introduced by the labour govt in 2007 to fight of recession from the GFC such as the notorious Pink Bats saga,  the wasteful school hall capital building incentives,  and the bonus payouts without any measures to prevent them wasting the monies on poor quality imported commodities.


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