GST Rate Change

[Perry]

OK - so it's a change from 12.5 to 15%
What then is the increase, expressed as
a percentage?

Tweedle Key says it's 2.02%

Some say it's 2.2%

The great unwashed think it's 2.5%

I make it 2%. (Maths was never my strong point)

Who's right?

Why? How?

(Do yer sums!)

And show us the workings out, OK?

Then tell us how/why you'll recover/ignore
the change in your PI business.
.

[Devious0]

Existing gst @ 12.5 %
New gst.......@ 15.0 %
gst increase = ..2.5 %

Increase as a percentage of existing gst = 2.5/12.5 X 100 = 20.0 %

[MikeO]

gst inclusive prices go up by 2.2%

1.15/1.125=1.0222222

[Perry]

Existing gst @ 12.5 %
New gst.......@ 15.0 %
gst increase = ..2.5 %

Increase as a percentage of existing gst = 2.5/12.5 X 100 = 20.0 %

20%! Hhhmmmm!

So what has the base price of an item gone up by?

I.e. how much more does it cost, expressed as a percentage?

[Perry]

1.15/1.125=1.0222222

Tweedle Key says it's 2.02%

[Devious0]

It looked like you were asking how much by a percentage GST increase by not how much an item cost with the new gst by percentage!

GST increased by 20%, everything increased by 2.2% so they say

[Perry]

Was $112.50
Now $115
Difference $2.50
Amount of increase divided by original amount
= 2.5/112.50
= 2.22% increase in price.
Yes?
No?
.

[Perry]

It looked like you were asking how much by a percentage GST increase by not how much an item cost with the new gst by percentage!

I did say that maths wasn't my strong point.
So yes, I did express that badly and the right
answer to the wrong question was . . . right.

[Perry]

Actually, Tweedle Key didn't quite say what
I said he said. He said:

We've cut all personal income tax rates, GST
has increased to 15%, and we've boosted NZ
Super, Working For Families, and benefit pay-
ments by 2.02% to compensate for the rise
in GST.

So, explain to me how a price increase of 2.22
is compensated by a 'pay' boost of 2.02%?
Did the W'gton woodenheads win 0.2% or is
my maths so bad I should be banned from
using a calculator?
.

[One]

The Wellington woodenheads reckoned that some companies will absorb the extra GST, so the average rise will only be 2.02%. The average rise due to GST, that is. They don't care that some companies will take the chance to put prices up more than GST. That's just general inflation so they're not compensating beneficiaries for that.

Seems a bit disingenious to me.

[flyernzl]

Note how the 3c per litre fuel tax increase has been cunningly hidden within this scenario.

So for any goods and service providers with a fuel cost component (ie most) the actual cost structure has risen by more than the GST increase.

No-one seems to be mentioning this right now.

[muppet]

A product priced at $100 excluding GST sells for $112.50 with GST.
With GST rising to 15% it would sell for $115.
This is an increase of 2.22%

And to calculate the GST component of a GST inclusive amount, multiply the figures by 3 and then divide by 23. (or else get a calculator)

[Perry]

All Bollard's Fault

Note how the 3c per litre fuel tax increase has been cunningly hidden within this scenario.

So for any goods and service providers with a fuel cost component (ie most) the actual cost structure has risen by more than the GST increase.

No-one seems to be mentioning this right now.

Likewise, Bollard warns retailers, including utility
companies, not to use the GST rise as an excuse
for hiking prices generally.

Just a shame he forget to also so
admonish his political masters, eh?

[Wayne]

Was $112.50
Now $115
Difference $2.50
Amount of increase divided by original amount
= 2.5/112.50
= 2.22% increase in price.
Yes?
No?
.

correct - not so hard really

[kyotolaw]

With regard as to why the benefits only went up 2.02% instead of 2.22%...

The boffins at Treasury figured out that some expenses of beneficiaries don't have GST included. This would be "residential rents" (Gasp!), "repayments on mortgages" (giggle!), and "interest on consumer debt".

So Treasury is expecting us all not to raise our rents with the GST increase... How likely is that?