The Harpers Week 4 - What It Means To The Kids

The Sunday Age

Sunday June 18, 2000

PADRAIC MURPHY

The Harper children will be among the hardest hit by the GST.

As children in part-time jobs who pay no tax because they earn under $6000 a year, Stephanie, Belinda, Daniel and Adam will not benefit from tax cuts designed to soften the GST's blow.

But clothing, entertainment and sport, where the Harper children spend their money, will see big price jumps after July 1.

Ann Harding, the director of the National Centre for Social and Economic Modelling, at the University of Canberra, said young single people will be significantly worse off because of the GST.

``Our modelling suggests that because of their lifestyle people in this category will see an average rise in expenditure of around 2.8per cent, but receive no compensation," Professor Harding said.

An article co-written by Professor Harding and published earlier this year notes that the government agreed to establish a GST-assistance scheme for low-income people not benefitting from social security changes, but details of the scheme have not yet been delivered.

Professor Harding said single-income families earning between $30,000 and $40,000 a year would benefit most from income tax reduction and increases in child support payments.

Professor Harding noted:

* the biggest GST winners are single-income couples with children;

* families with children will do better than those without;

* sole parents fare relatively well;

* the gains from the GST to individuals without children with incomes around $35,000 are very modest or almost non-existent;

* individuals with incomes between $38,000 and $50,000 do particularly well from the tax changes.

Accounting for the kids

Stephanie lives off savings and spends about $50 a week on clothes and sport.

Belinda earns about $65 a week from baby- sitting and a part-time job. Spends: $20 on restaurants, $15 on CDs, $20 on entertainment and $10 extra

Daniel earns about $35 a week from a chemist round. Spends:$15 on fast food, $5 on videos, $5 on CDs and $10 into bank account

Adam earns about $35 from a part-time job as a shop assistant. Spends: $10 on fast food, $5 on entertainment and $10 in bank

Accounting for the kids (continued)
        Now     July 1:
CD
        $29.95  $28.90
Cinema ticket
        $12.50  $13.50.
Haircut
        $25     $27.
Video tape rental
        $6      6.50
Tennis racquet
        $199    $195.40.
Sound system
        $740    $702.25.
        Now     July 1:
Sports lessons
        $37     $40.30.
Train ticket
        $2.30   $2.48.
Hamburger
        $2.95   $3.22.
Soft drink
        $1.70   $1.58.
Jeans
        $90     $98.80.
Source: Australian Competition and Consumer Commission