Our spending and GST

Economics & Business Year 8 AC v9.0 85

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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. 

By the end of Year 8, students explain how markets influence the allocation of resources to the production of goods and services. They explain ways that businesses adapt to opportunities in markets and respond to the work environment. They describe the importance of Australia’s taxation system and its effect on decision-making by individuals and businesses. Students explain why individuals and/or businesses budget and plan.

Students develop a range of questions to investigate an economic and business issue. They locate, select and organise relevant information and data. They interpret information and data to identify economic and business issues and trends, and describe economic cause-and-effect relationships. They develop a response to an economic and business issue. They identify and evaluate potential costs and benefits. Students use economic and business knowledge, concepts, terms and research findings to create descriptions and explanations.

Content descriptions

Economics and Business Knowledge and Understanding

The importance of Australia’s system of taxation and how this system affects decision-making by individuals and businesses. (AC9HE8K04)

Student learning resources

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Explainer

Goods and services tax

 
Template

Spending diary

 
Calculator

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

  1. 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.
  2. As a class, read the explainer.
  3. 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

  1. 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.

  2. 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
  3. Add the total amount of money students in the class paid in GST over the course of the week.
  4. 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?
  5. 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

  1. Explain to students that the money they pay in GST is collected by businesses and paid to the government through the ATO.
  2. Usually businesses report and pay the GST they collected to the ATO quarterly.
  3. 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?
Our spending and GST - Teacher Instructions (PDF, 166.38 KB)

Useful prior learning

Related Activities

The following activities have the same or similar learning experiences but do not make use of the spending diary.