Our spending and GST
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Introduction
Students learn that even if they are not working, they are taxpayers and pay tax on most goods and services they purchase. They keep a spending diary to work out how much GST they paid in the course of a week and how much their class collectively paid. They also consider what this means for businesses in terms of reporting and paying the money they collected in GST.
Achievement standard
By the end of Year 8, students explain how markets operate and recognise why governments may influence the market’s operation. They explain the rights and responsibilities of consumers and businesses in terms of financial and economic decision-making. They explain why different types of businesses exist and describe the different ways businesses can respond to opportunities in the market. Students describe influences on the way people work and factors that may affect work in the future.
When researching, students develop questions and gather relevant data and information from different sources to investigate an economic or business issue. They interpret data to identify trends and relationships. They propose a range of alternative responses to an issue and evaluate the costs and benefits of each alternative. They apply economics and business knowledge, skills and concepts to familiar and unfamiliar problems. Students develop and present evidence-based conclusions using appropriate texts, subject-specific language and concepts. They identify the effects of an economic or business decision and the potential consequences of alternative actions.
Content descriptions
Economics and Business Knowledge and Understanding
The rights and responsibilities of consumers and businesses in Australia in terms of financial and economic decision-making (ACHEK029).
Economics and Business Skills
Apply economics and business knowledge, skills and concepts in familiar and new situations (ACHES036).
Present evidence-based conclusions using economics and business language and concepts in a range of appropriate formats, and reflect on the consequences of alternative actions (ACHES037)
Student learning resources
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Goods and services tax
Spending diary with GST
GST calculator
Suggested activity sequence
This sequence is intended as a framework to be modified and adapted by teachers to suit the needs of a class group.
Note: this activity can be introduced in the first lesson, but the majority of the lesson will take place one week later as students are required to keep a spending diary in this time period.
Part A: Spending diary
- Explain to students that they are all taxpayers, even if they do not have a job. Tell students that they pay tax on most of the goods and services they buy. This is known as the goods and services tax, or GST.
- As a class, read the explainer.
- Set students the spending diary challenge.
Over the next week, you will keep a spending diary. Use the diary to record everything you spent money on – include everything such as mobile phone costs or top-ups, bus fees and snacks.
Explain that the spending diary includes students identifying the amount of GST they paid if applicable.
Part B: Using information from students’ spending diaries
- At the end of the week, students add up their total spending and amount of GST they paid. They also list items that were GST-free.
Refer students to the GST calculator.
- Invite each student to add their totals to the class tally sheet. Post a chart on the wall or record totals on the board.
Goods and services with GST GST-free goods and services Student name (or number) Total spent GST paid Item name - Add the total amount of money students in the class paid in GST over the course of the week.
- Invite student reflections on the amount of GST they paid as a class. Possible prompts include:
- Were you surprised at how much tax we pay?
- How do you think the government spends this tax revenue?
- How do you feel about contributing to the provision of government services?
- Discuss the items listed under the GST-free column and discuss why these items are GST-free. Discuss the following:
- What do these items have in common?
- Are these items essential?
- Is it fair that these items are GST-free? Why?
Part C: Businesses and GST
- Explain to students that the money they pay in GST is collected by businesses and paid to the government through the ATO.
- Usually businesses report and pay the GST they collected to the ATO quarterly.
- Ask:
- Imagine that all the items purchased by the class were purchased from one supplier. In simple terms, how much would this business pay in GST for this week?
- What was the total price of goods before GST was added?