More pain predicted for businesses with GST rise

The potential slow down for businesses around the country when the GST rise hits this Friday is concerning, particularly as the pre-GST period has not brought any significant rise in spending and as consumer confidence in recent surveys has taken a fall according to MYOB.

It also showed that 85% of New Zealanders expect the GST rise to have an impact on households, with almost 60% expecting that impact to be significant.

MYOB New Zealand general manager Julian Smith says what is seen from the survey snapshot is that Kiwi households are very aware of the GST change, which MYOB expects could have a big impact on household income and spending.

He says for businesses around the country, the potential slowdown is concerning as the GST rise has represented a 'double-whammy' for businesses, with both the operational and compliance requirements of the change and the effects on consumer spending to manage.

"As MYOB has been highlighting for some time, there's a lot for businesspeople to be across in the lead-up to the tax changes. These elements, like pricing, systems and supplier agreements - all of which take time and resources for businesses to plan and prepare for - have been underscored again in this survey."

According to the survey, small businesses are likely to be hardest hit, with 74% of households and 68% of business respondents expecting the local small business community to bear the brunt of the GST rise.

Smith says businesses are going to need to look closely at how prepared they are for any change in consumer spending after the GST rise, whether it has a direct or indirect impact on their operation.

He says businesses are going to have to be very focused on business essentials, like cash flow, stock levels and marketing, in order to be prepared for the immediate after-effects of the GST rise.

"Even though the spending fall might be short lived, it's going to be a challenging time for business, and they are going to need all the support possible," says Smith

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to NetProphet go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.

Email Updates Sign up now

RSS Feeds View the list

Twitter Read our tweets