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Scams just skim the surface of GST black comedy
By JOHN GILMOUR
Friday 21 July 2000

As you would expect from a sophisticated person who writes for Business Age, one of my favorite beverages is a Slurpee - a mix of ice, fizz, sugar and food dye that is sold from wonderful self-service dispensers at 7-Eleven stores.

Buying a Slurpee is almost as much fun as drinking it. But not just because I get to choose between red, green, yellow, brown or sometimes even blue chemicals; I get to use the self-service dispenser and to judge how much icy sludge I can load into the cardboard container.

The real fun comes at the cash register. It is so much fun, I have reached the stage of buying occasional Slurpees not to drink but just to watch some magic. At a rough guess, about one in 10 of my Slurpee purchases lets me see sleight of hand almost as slick as the Lance Burton show in Las Vegas.

I buy a Large Slurpee for $1.80, offer $2 and get my 20 cents change. But while I pretend to be busy with my Slurpee, I watch the cashier, the magician, ring up a Medium at $1.55.

Who wants a receipt when buying a messy iced confection? So there's no paperwork, and I am more worried about carrying out my Slurpee than carrying out an audit.

The magician clouts 25 cents more in the till than is recorded. Over a normal shift, the extra could be worth $20. In summer, the rewards are greater. He probably collects his winnings at the end of the shift when he counts the till; or if he is really sophisticated, he has already taken his $20 at the start of the shift and has a system of counting the tricks so he can stop when the scam is balanced, like the cricket umpire's transfer of eight coins from one pocket to another to count the balls in an over.

The great former Melbourne hotelier and restaurateur George Frew, who has been robbed more often than the Sheriff of Nottingham (he had a whole business stolen from him once), says barmen can make an art form of the false till count. One magician employed by George used to take his $10 graft money out of the float at the start of the shift and then put a cork in a jar for each dollar he stole. When there were 10 corks, he would start being honest.

Gotcha, says the Federal Treasurer. When that magician goes to spend his extra money, he will pay 10 per cent of his outlays as GST and thus will we recover something from the black economy.

Phooey, says every small cash business in the country. The Slurpee scam and a dozen like it are proliferating in cash businesses since the introduction of the GST.

The most common and universal scam is, of course, the open till. Go to your milk bar, family-run coffee lounge or sandwich shop and look closely! Since the advent of the New Tax System there are more open cash drawers and fewer printed receipts than ever. Some have new computerised cash terminals, but many also still have their old cash registers on the counter: drawers ajar, of course.

Most prices have risen by nearly 10 per cent GST, remember, but at a rough guess the scams have doubled.

Because of the high level of GST - yes, it's only in Canberra that 10 per cent rises are regarded as modest - the incentive for fraud is enhanced enormously. In fact, by increasing prices so sharply, the system has also enabled more scams because they are confusing to customers.

And Canberra said the GST would catch the black economy! Obviously, most large companies with sophisticated computer inventory systems, foolproof cash registers and video surveillance will be able to keep scams to a minimum. And no doubt the vast majority of cashiers at 7-Eleven are honest as daylight. But in many food and beverage businesses, especially small owner-operator or family-owned enterprises, the GST is merely increasing the cashflow to be skimmed.

How will the Tax Office cope with the increased skim and scam? Like every other country in the world with a GST or Value Added Tax, the tax authorities will have to recruit and train thousands of new GST tax auditors who will watch and count the activities of all cash businesses.

When the Tax Office has worked its way through the nightmare of handling the GST introduction and coping with the flood of paperwork associated initially with Business Activity Statements, it will no doubt increase the numbers of field staff.

They will check the paperwork of businesses, audit GST collections and remittances, and probably frighten some business people so much that they shake out more GST revenue than the businesses actually collect.

They will prowl around coffee shops and milk bars, watch bistros and restaurants, count customers and cash-register drawer openings, and sit in unmarked vans with cameras trained on the persons who count the tills at the end of the day. Some of the photographs of notes being stuffed into pockets will find their way to court, but most of them will just be shown to the cheats as part of the inevitable negotiations to collect more tax.

And what will we call that army of new tax snoops? The Tax Office, surely, will try a spin by calling them Business Support Officers or Field Tax Advisers or, imagine it, Client Liaison Officers.

But to most of the country, they'll be regarded as the GST Police - and don't you know just how the term will be shortened by the ever-inventive operators of the cash economy. Just fill in the empty spaces. G*ST*POlice!

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Comment:
I've got to take care what I say. As a known stirrer this may be filed by the GeSTaPo of OZ. Even the local rag announced more staffing levels at the Tax Bureau. In the market place many businesses simply shut shop. Who cares? GST is a yawn adding hours of paperwork. Cash is king! Cash rules, OK! Doesn't it?

Regards from OZ - Gestapo vaudeville

-- Pieter (zaadz@icisp.net.au), July 22, 2000

Answers

Just make sure that the "G*ST*POlice" drink several Slurpees. They'll either be too busy holding their stomachs or examining their urine to cause any problems for awhile.

-- (kb8um8@yahoo.com), July 23, 2000.

Reminds me of the old employee theft story...

Guy walks into a bar, has a few drinks, lays his money down and leaves. After he's out the door, the bartender picks up the cash, puts it in his pocket and says; Hmmm. That guy didn't pay his bill but he sure tips well.

-- CD (costavike@hotmail.com), July 23, 2000.