An Unjust Application of the GST

It appears that there will be some anomalies in the application of the soon-to-be introduced Goods and Services Tax (GST). One of these applies to people living in boarding/rooming houses, caravan parks and hotels/motels – they will have to pay a GST on their tent. Unfortunately this will have a detrimental effect on large members of some the most socially and financially disadvantaged people in our community.

According to the 1996 Census, there were 161,405 permanent caravan park residents in Australia, with almost 1500 children up to 14 years of age living in private boarding houses and hotels in Victoria. Furthermore, there were 7000 Victorians, of whom 85% had a disability, living in boarding houses or special residential accommodation.

In 1999, it was demonstrated by the Salvation Army that private hotels were being increasingly relied upon to accommodate homeless families in crisis, with many of them paying up to 50% of their income in rent. And in the same year, in another study (commissioned by Hanover Welfare Services, the Salvation Army and the Society of St Vincent de Paul), of 1245 people seeking crisis accommodation in a single four-week period, 227 (18%) had been living in a caravan park, rooming house or hotel/motel immediately beforehand.

So clearly there are large numbers of the most needy in our community reliant on caravan parks, boarding houses and hotels/motels for housing. And how will they be treated when the GST is implemented?

In a word – unjustly. They will have to pay a full 10% GST on their rent during the first 27 days of occupancy and 5% thereafter, whereas the more affluent in our community – who rent houses, flats and units as their principal places of residence – will be exempted.

What should be done? Those residents of caravan parks, rooming houses and hotels/motels should be exempted from having to pay the GST where these places of accommodation constitute their principal or only place of residence. This would be an equitable solution, but so far the Federal Government has resisted all entreaties to modify its stance.

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