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Waiters delivered pay cut under GST!!!!!

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Media Release Thursday, 16 September 1999

Waiters delivered pay cut under GST!!!!! ,

Australia's billion dollar a year hospitality industry has been rocked by the news that waiters, waitresses and leisure staff will lose 10% of their tips under the GST regime, tax experts have warned today.

Hospitality staff are essentially going to take a pay cut when the GST is imposed on their tips and gratuities from 1 July 2000.

Ray Regan, President of the National Tax & Accountants’ Association Ltd states “the problem under the GST system is that 1/11th of the total consideration paid by patrons of restaurants, resorts etc, is subject to GST. Therefore, if a patron dines out at a restaurant and pays $100 for their meal and also includes a $20 tip for the waiter, then the GST would be payable on 1/11th of the total $120 paid by the customer. That is, 1/11th of the $20 tip paid by the customer is subject to GST.

Applying the GST to tips could bring the hospitality industry to breaking point. Already we have an industry that is experiencing a shortage of staff, and to take 1/11th of their tips may represent the "final straw* for people considering entering the hospitality industry.' .

Ray Regan, states that, ‘ applying the GST to waiter, waitresses and leisure staff tips, may have catastrophic consequences for our billion dollar a year tourist industry. The reason being, employees in this industry normally rely heavily upon tips and gratuities to subsidise their normal pay rates.

Taking 1/11 of waiters, waitresses and leisure staff tips in GST is affectively a pay cut for people working in the hospitality industry*.

Ray Regan, President Mobile: 0418 320 751 Tel: 03 9862 7777 Fax: 03 9866 3072