The Federal Opposition say punters will pay more to bet on Melbourne Cup if GST rate is increased
THE Federal Opposition fears changes to the GST will spoil the fun of a flutter on sporting events including the Melbourne Cup carnival.
THE Federal Opposition fears changes to the GST would make betting more expensive, spoiling the fun of a flutter on sporting events including the Melbourne Cup carnival.
Punters placing a bet this Ladies Day won’t pay GST on their wager because under current laws bookies pay the tax on the margins they make instead.
But Shadow Assistant Treasurer Andrew Leigh said he’s worried this could soon change now the Turnbull Government has declared everything was “on the table” when it came to tax reform.
Every year the Melbourne Cup carnival sends even wagering novices running for the bookies, with Australians spending an estimated $400 million on the race that stops a nation alone.
Mr Leigh said a change to the way gambling was taxed would make the Melbourne Cup “a whole lot more expensive for a lot more people”.
Under current tax law, consumers don’t pay GST when they place a bet.
Instead bookies pay GST on the value of wagers they’ve collected minus the prize money awarded.
However, Mr Leigh said betting agencies pass this expense on to consumers by incorporating the cost of the GST into their margin — meaning if the rate of the GST goes up so too with the cost of betting.
“If a bookie is charging a 10 per cent margin then one eleventh of that is the GST,” Mr Leigh said.
“But if the GST goes up 50 per cent then the GST on the margin would go up 50 per cent.”
The Fraser MP said even if the government decided not to raise the rate of GST, the cost of betting could still go up, if the way gambling is treated under the law was to change.
“If everything is on the table they could well choose to put the GST on the entire bet and that would have a big impact on the many Australians to like a flutter on Cup day,” he said.
Speculation the GST rate could be raised to 15 per cent, or base broadened to apply to exempt goods and services such as fresh food, health and education has ramped up since the Prime Minister Malcolm Turnbull confirmed all potential tax reforms were “on the table”.
Treasurer Scott Morrison has since said such suggestions were on the “extreme” end of possible changes.
Australian Churches Gambling Taskforce spokesman Mark Zirnsak said increasing the tax on gambling was probably a “good thing”.
“Increasing the tax on gambling is not a bad thing if it helps deter people from getting into gambling in the first place or reduces the likelihood they spend more than they can afford,” he said
“Also if it was to mean more money flowed back for the benefit of government, which means for the benefit of the community instead of into the hands of the gambling barons then that’s a good thing from our point of view as well.
“At this stage we’d be guessing as to what the impact is, but there’s potential that an increase in tax on gambling might be a good thing.
“That wouldn’t be a good reason for opposing a rise in the GST as such.”
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