Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
GST hits sales of businesses and farms.

Download WordDownload Word


Media Release



Federal Member for Chifley


For Immediate Release




Small business operators and farmers selling their businesses risk becoming entangled in complex court challenges and Tax Office red tape to avoid paying GST on the sale, according to Federal Member for Chifley, Roger Price MP.


Mr Price said under John Howard's $30 billion GST, businesses and farms which were sold as a "going concern" were "GST-free", but the definition of what constituted a "going concern" created more problems than it solved.


“For instance since the introduction of the GST in New Zealand, there have been hundreds of court cases disputing whether a business or farm was sold as a "going concern", said Mr Price.


"From the New Zealand experience it's clear that the farm or business has to continue to be operated as it has always operated in order for the sale to be GST-free".


“In one case a boarding house was sold to a motel operator who then turned it into a motel. The court said this was not a "going concern" and so the sale was subject to GST. In another case an orchard was sold to a developer, who bulldozed the fruit trees. Again the court ruled that GST must be charged."


Mr Price said farmers and small business operators deserved an explanation from Mr Howard clarifying whether his "going concern" definition for the GST was the same as the New Zealand model.


“Mr Howard's refusal to explain what he means by "going concern" is a deliberate attempt to keep farmers and business-people in the dark', said Mr Price.


"There are many questions John Howard won't answer".


"For example, what happens to a milk-bar which is sold and then turned into a pizza takeaway? Is this sale GST-free?"


“What about a farmer who sells his property to hobby-farmers?"


"How long does the purchaser have to continue to operate the business or farm as a "going-concern" to maintain GST-free status?"


"Either Mr Howard doesn't know or he is hiding the answer.


“The GST will be a lawyers' picnic," Mr Price said, "as farmers and business people are forced to call on them to draft complicated sale contracts, listing complex terms and conditions to ensure the vendor wasn't hit by the GST, even years after the sale had gone through".




Media Contact - Michael Galderisi Phone: 9625-4344 Fax 9832-2641



Dated: 11 September 1998