iscoverGST is one of the leading topics currently driving the tax reform conversation, however some accountants believe it’s not as much of a “big deal”.
GST reform continues to spark debate among accountants
17 July 2025
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9 minute read
Accountants are calling for an increase to the GST threshold to alleviate pressure on small businesses, with opinions differing around the need for its complete, holistic reform.
As GST hit the 25-year anniversary mark last month, discussions around how it was originally introduced and proposed to the Australian economy have surfaced.
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Speaking on this week’s Under the Hood podcast episode, David Perrott, Fab Tax senior accountant, said GST was first introduced on 1 July 2000 by Prime Minister John Howard to replace the wholesale sales tax at the time.
Perrott said there had been significant debate in the Senate over what GST would and wouldn’t apply to; however, with the removal of the wholesale sales tax and the addition of the 10 per cent GST, the price of certain items did turn out to be cheaper.
“It’s more complicated when you have things that are subject to GST and not subject to GST. It was a matter of discussing why a cooked chicken had GST and why a raw chicken didn’t have GST – and why is that fair? How does that work?” Perrott said.
“When the legislation came in, all the accountants working in the wholesale tax area moved over into GST and argued over muesli bars and packets of chips, but the whole thing with GST is that it is supposed to be unseen to the consumer. People have a problem with it because they view it as an additional tax, but the reality is that it was never meant to be that way.”
Though the introduction of GST was well worthwhile for businesses at the time, he noted the GST reform conversation had surfaced as a result of it being more challenging for today’s small businesses grappling with administration.
Miriam Holme, Fab Tax founder and director, echoed this sentiment, noting it was increasingly hard for small businesses to manage under the $75,000 threshold.
However, Holme also noted that the 10 per cent rate was much better than what was experienced and enforced overseas, so if reform was going to come, it needed to come in a way that provided ease to accountants.
“I think the thing that is most annoying for accountants and business owners is trying to administer the 10 per cent on some things and not on others. As an accountant, I just want an even playing field,” she said.
“If we’re going to have a little bit of reform, I’m okay with some of these things that are supposedly GST-free to have some GST on it, as it just makes it harder on everyone. It is very hard sometimes administering some of these GST-free things, so let’s put GST on a few extra things to make it simple.”
In addition to GST, Holme and Perrott said while it was a worthwhile conversation, there were other taxes and subject areas that deserved to be given more attention in terms of reform, such as luxury car tax, the concessional contributions cap, payroll tax and fringe benefits tax.
Perrott said the tax reform conversation was valid and the accounting community should continue to make suggestions to improve the system.
“A lot of taxes are there for a particular reason, and the taxes are there to raise revenue that provides stuff like medical resources and education. So, it is a necessary evil,” he said.
“I think we just have to run with that and try and look for the positives and try and suggest things we can do to make it fairer without making it more complicated. The more complicated we make it, the more insane it becomes.”
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