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"Australia's latest systems rescue By COLIN KRUGER Tuesday 18 January 2000

AFTER the Y2K hysteria, which ended up costing industry billions of dollars, Australian organisations are waking up to the shock of another big bill when the GST takes effect in July.

Many companies are not expected to make the deadline and face losses estimated to reach into the hundreds of millions, industry analysts say.

There is a lack of information and understanding of the GST's magnitude because most businesses have been distracted by Y2K, says Craig Kemsley, a partner with Deloitte Touche Tohmatsu. He expects a stampede as companies start scrambling for resources this month to meet the GST deadline.

"It's a six-month window and you want to be up to date, you want to have everything done by the end of May," says Kemsley.

The IT research firm the Gartner Group is also predicting compliance problems.

"There's a huge wake-up call, based on our November surveys. There is still not a great understanding of just how extensive the changes are within a business," says a Gartner Group analyst, Bruce McCabe.

"Seven per cent of all business we surveyed said they didn't think they would be able to make it by July. We think that number is going to go up as they explore the problem more."

(snip)

Ernst Young estimates that once companies have assessed the impact of GST on corporate systems, they will need a further three to six months to implement the system changes.

(snip)

"Small businesses won't be able to dodge compliance without facing financial losses, with the added sting of higher costs for laggards.

"Much like the earlier Y2K programs, small businesses are starting these projects and finding that they are much bigger than they anticipated.

Finding the people to do the work is a problem, and costs are being pushed upwards because the necessary skills are in short supply, says Rushenka Perera, the communications manager at Solution 6, a financial services and applications provider.

(snip) "While tackling the Y2K bug consumed an enormous amount of time and money, it was a problem that could be approached in a logical and systematic fashion, and it was largely confined to IT departments.

GST, on the other hand, will affect every business process, and every aspect of an organisation's operations, making the problems of implementation a lot bigger than those created by Y2K.

The GST will affect all of an organisation's business processes that involve billing, invoicing, money collection, cash flow, and pricing.

(snip)

"There are other major differences to the GST outlay as well. A large proportion of the Y2K spending was on hardware, while GST dollars will largely go into software upgrades and professional services. And most of that investment will be spent in the next five months.

(snip)

"The biggest challenge facing corporate Australia at the moment, however, is to survive the skills shortage expected to hit in the coming months as many organisations look for outside help.

The Ernst Young survey found 83 per cent of companies are relying wholly on external providers for their GST requirements.

"I've been telling our clients for the past four months, even if they're not actually using them, they should be securing their partners now, because it will be difficult to get the right people," says McCabe."

-- Rachel Gibson (rgibson@hotmail.com), January 23, 2000

Answers

Ok I'm stupid.........what in the Hell is GST?????????????????????

-- gomer (GNOMER@DOT.COM), January 23, 2000.

RACHEL, WHAT THE HELL IS GST?

-- 8TH MAN (SSTOLOWSKI@TNNS.NET), January 23, 2000.

Goods and Services Tax.

-- I'm Here, I'm There (I'm Everywhere@so.beware), January 23, 2000.

(P.S. And that pretty-much exhausts my knowledge of GST, other than what I've read that people in Australia aren't exactly dancing with joy about it...)

-- I'm Here, I'm There (I'm Everywhere@so.beware), January 23, 2000.

GST Sigh

A tax paid by consumers on goods and services purchased, over and above corporate and personal and property taxes. And over and above provincial sales taxes. We've had it in Canada since the mid-eighties, and we're not especially fond of it. Covers most items like gasoline, food, clothing, utilities, funerals, you get the picture.

The big debate when it was first being implemented revolved around whether or not it should be shown separately on receipts. In most cases, it is. At the time it meant a big expense for business in acquiring the software to do and to show the calculations and end result.

I do not envy Australia right now.

-- Rachel Gibson (rgibson@hotmail.com), January 23, 2000.