GST to hurt savings
Most Australian investors believe they will be worse off under the goods and services tax (GST) and even those who think they will be better off do not expect to increase their savings as a result.
Most Australian investors believe they will be worse off under the goods and services tax (GST) and even those who think they will be better off do not expect to increase their savings as a result.
The latest Challenger/Assirt investment sentiment index reveals that more than half (52 per cent) of people surveyed believe they will be worse off under GST, however people on higher incomes (over $60,000) are more likely to feel they will be better off under GST than people earning less than $39,000.
Of the people who believe they will be better off, 57 per cent expect their saving levels to remain about the same. However, while 26 per cent of people on incomes over $60,000 says they will use any increase in income to invest outside superannuation, only 19 per cent of people earning less than $39,000 are interested in this option.
Likewise, while 27 per cent of higher income earners says they will make additional mortgage payments with extra income, only 16 per cent of people earning less than $39,000 will follow suit.
Challenger International general manager strategic marketing Phill Antman says people have madfe up their mind on the winners and losers under the new tax regime. “There is a clear polarisation of opinion as to who the beneficiaries would be under the GST and this is closely aligned with income levels,” he says.
The survey also found that almost half (43 per cent) of people who said they would save more under GST had less than $10,000 to invest.
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