Risen Against Gravity


I've moved my blog and portfolio to http://fusedthought.com/en/blog. However, this site will still be kept as an archive...

Individual entires can still be accessed using their trackback links.

Thursday, November 16, 2006

Wow! That shooting star is going up! Thats GST!

GST is going up again... and by GST, I meant Goods and Service Tax, not Greet, Smile and Thank. If the latter was true, it would have been great...

I don't know, but I guess its another cycle of increment. I guess we should be used to it already since that time when it was increased from 3% to 5%. Now it would be increased to 7%.

It seems to be a legal way to "take from rich and give to poor" theory. However, one question would be: "What would happen to the society's middle class". We are neither here nor there. We don't qualify to get the benefits and also not rich at all.... So in my view, it seems that the middle classes are the ones that bare the full brunt of such an increment.

Its a vicious cycle. In the market, consumers would ultimately be the one to suffer. Picture this..... If price of materials increase, manufacturing cost increase, and thus, product cost increase and then this amount would be passed on to consumers.

One point to note. There is a snowball effect along that price pathway. When materials increase in price due to GST, in order to cover cost, manufacturers have to increase the price. And in addition to this price, there is still GST. and this would continue increasing until the final party to get the goods.

It was argued in the radio that hawker stalls may also suffer quite a lost. Although there is an increase in GST, hawker pricing aren't as price inelastic as other goods. A small increase in pricing of the food would turn even the most frequent customers away. Actually especially frequent customers. They may feel that they have been paying that amount for years and an increase is unacceptable.

To conclude, I think that any increase by the Government will generate alot of arguments and views... But ultimately, I guess a persons view is will still be bias towards their own backgrounds in cases such as this.....

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