Small businesses will spend up to $5000 dollars in preparing their systems for the GST, but the Federal Government says a $200 handout will be enough.
Industry executives and analysts say the GST will see small businesses paying for GST-compliant software and hardware, GST-specific education, and external accountancy fees.
Last year, the Federal Government said it would spend $500 million on GST-related expenses for small businesses. From this, $320 million would be spent on the $200 vouchers, the Government said.
According to the Australian Bureau of Statistics and the Small Business Association of Australia (SBAA), with around 800,000 small businesses in Australia (annual turnover under $10 million) this represents an expenditure of only $160 million dollars, half the original figure to be spent on the vouchers.
GartnerGroup analyst Bruce McCabe said the level of GST-related education, including "roadshows, seminars and public education" has been "woefully inadequate".
A one-person PC-operated business would need to spend around $1000 on software, consulting and education, he said, and the cost would increase with the size of the company. "At best, it [the $200 voucher] will cover a fifth of the cost. If anyone pretends it covers the whole bill, they're not on the same planet."
McCabe said it was a "much bigger help" that companies were able to claim GST-related expenditure as a tax deduction.
Jonathon Fowler, an SBAA spokesman, said the GST would hit retailers the hardest. He said shops operating with cash registers would need to replace them with new GST-compliant machines, which he said would cost around $4500. Otherwise, they would need to purchase PCs and accompanying GST software, which would also incur training costs, he said.
Under the new tax system, companies will be required to submit quarterly "GST return" reports to the Government.
Fowler said most small businesses would not fully understand the new tax system and would have to hire accountants to help with the reports, which would cost up to $1200 per quarter. He said the Government promised free GST-specific seminars in September, October and November that never took place.
The Treasurer's office was not able to comment.