Price Go up BUT salary still the same!!!!!!!!!!

[night86mare]

Yes, but you fail to mention that your input $1.07 your vendor would have increased it as well since they too collect gst, because what you used to buy from your source the prices have increased as they too collect gst.

It is so simple and yet you fail to see what I am trying to say. I am not disputing the collection part.. I am stating the increased in your raw material cost will undoubtedly increase your own cost due to increase in gst.

I try to simplify it in the simplest way already. Although you only indicate a small input amount of $1.07, but many products raw material are not that simplistic every parts and services from their vendor increases.

../azul123

well, i would maintain that most products in the market do not go beyond 5 levels from the rawest form to the final product.. and of course when you're talking about basic necessities, most do not go beyond even 1 or 2 levels.

certainly with a 10 level stacking of 0.9% increase you will get a 9% increase (approximated from 1.009^10), for perhaps luxury goods like cars, holiday trips.

other than that, for salt, washing powder, etc.. since remember, the focus on gst affecting the population is only for the poor - it is at most a 2% increase, nothing like your 50 cent fishball noodle increase warrants.

 

[conquer500]

well, i would maintain that most products in the market do not go beyond 5 levels from the rawest form to the final product.. and of course when you're talking about basic necessities, most do not go beyond even 1 or 2 levels.

certainly with a 10 level stacking of 0.9% increase you will get a 9% increase (approximated from 1.009^10), for perhaps luxury goods like cars, holiday trips.

other than that, for salt, washing powder, etc.. since remember, the focus on gst affecting the population is only for the poor - it is at most a 2% increase, nothing like your 50 cent fishball noodle increase warrants.

obviously you are not looking at the finer and wider part of the economy. you are not understanding the business economic also. you replies are making people laugh, you are seeing it as that simple.

 

[night86mare]

obviously you are not looking at the finer and wider part of the economy. you are not understanding the business economic also. you replies are making people laugh, you are seeing it as that simple.

...economics is ALL about simplifying things; every science works at trying to simplify the complicatedness of real life scenarios, so we can better predict subsequent trends

obviously, i am looking at the micro part in this example; azul needs numbers, so i give him numbers to work with, when glossing over would not work.

fyi, if you could provide a more simplistic explanation that is easily understandable, be my guest. if you read the exchange you would realise what is going on.

p.s. "finer and wider" happens to be an oxymoron, it is like saying that i am looking at the shorter and taller part of a pole.

 

[azul123]

1) no, business costs will not increase, like i've said before, gst registered companies get to claim back the gst they pay for operating costs (including inputs/raw materials) from the gahment, so don't anyhow say :nono:

I have to search your past post to show you what you said? you said business cost will not increase because of gst increase.

How could that statement make sense? as company's raw material cost increase so either it will affect bottom line or past the increase to customers. It is now obvious to me that you either have no clue what you are talking about and by denying gst increase has part to play in cost increase you only digging yourself deeper into a hole.

Hope you don't go back and edit your posts, :bsmilie:. Anyway, I'm done debating with you on this topic, I don't want to be drag into a tactic of "if can't convince.. confuse your opponent" play with you.

Thanks for the very short duel. My last post on this topic..

../azul123

 

[CYRN]

well, i would maintain that most products in the market do not go beyond 5 levels from the rawest form to the final product.. and of course when you're talking about basic necessities, most do not go beyond even 1 or 2 levels.

certainly with a 10 level stacking of 0.9% increase you will get a 9% increase (approximated from 1.009^10), for perhaps luxury goods like cars, holiday trips.

other than that, for salt, washing powder, etc.. since remember, the focus on gst affecting the population is only for the poor - it is at most a 2% increase, nothing like your 50 cent fishball noodle increase warrants.

but you forgot that in business, your supply chain dosen't only consist of 1 line. you have multiple raw supply lines, utilities expenses, rentals.. most if not all attracts additional gst.

 

[conquer500]

...economics is ALL about simplifying things; every science works at trying to simplify the complicatedness of real life scenarios, so we can better predict subsequent trends

obviously, i am looking at the micro part in this example; azul needs numbers, so i give him numbers to work with, when glossing over would not work.

fyi, if you could provide a more simplistic explanation that is easily understandable, be my guest. if you read the exchange you would realise what is going on.

p.s. "finer and wider" happens to be an oxymoron, it is like saying that i am looking at the shorter and taller part of a pole.

guess you are the pro, we are the simple minded in viewing economics.

well, you said you gave him numbers, why u only give him half the numbers required to explain why someone increase prices.

if you still dun understand, go ask your director or your boss.

 

[night86mare]

I have to search your past post to show you what you said? you said business cost will not increase because of gst increase.

How could that statement make sense? as company's raw material cost increase so either it will affect bottom line or past the increase to customers. It is now obvious to me that you either have no clue what you are talking about and by denying gst increase has part to play in cost increase you only digging yourself deeper into a hole.

Hope you don't go back and edit your posts, :bsmilie:. Anyway, I'm done debating with you on this topic, I don't want to be drag into a tactic of "if can't convince.. confuse your opponent" play with you.

Thanks for the very short duel. My last post on this topic..

../azul123

...if you have not understood what i have said, then do not pretend that you have

raw material cost DOES NOT INCREASE, as a result of gst, it is because the raw material supplier wants to retain his REAL PROFITS, instead of nominal profits, since his nominal profits will remain constant. he is the one that jacks up the prices, so he can continue living his current lifestyle

the relation between REAL PROFITS and NOMINAL PROFITS is the price level, since while he can claim everything for his BUSINESS RUNNING, his normal expenditure on OTHER GOODS will INCREASE since the price level has increased.

get your facts straight, and read carefully; and stop making such amusing accusations. if you cannot see the fact that i am actually considering your points, and bothering to factor in your arguments to come to some sort of a consensus, then why bother at a pretense of learnedness and logical thinking?

 

[conquer500]

I have to search your past post to show you what you said? you said business cost will not increase because of gst increase.

How could that statement make sense? as company's raw material cost increase so either it will affect bottom line or past the increase to customers. It is now obvious to me that you either have no clue what you are talking about and by denying gst increase has part to play in cost increase you only digging yourself deeper into a hole.

Hope you don't go back and edit your posts, :bsmilie:. Anyway, I'm done debating with you on this topic, I don't want to be drag into a tactic of "if can't convince.. confuse your opponent" play with you.

Thanks for the very short duel. My last post on this topic..

../azul123

i agree with you that he have no clues what he is saying at all

but you forgot that in business, your supply chain dosen't only consist of 1 line. you have multiple raw supply lines, utilities expenses, rentals.. most if not all attracts additional gst.

he is seeing the economy in a very very simple way.

my last post also cause its not easy to understand the economy as a whole.

 

[night86mare]

but you forgot that in business, your supply chain dosen't only consist of 1 line. you have multiple raw supply lines, utilities expenses, rentals.. most if not all attracts additional gst.

what matters is the stacking effect

on a case by case basis, you only get one level of stacking; i really wonder why nobody can understand such a simple explanation.

let's give numbers again, ok:

$1 electricity bill (base before gst) and $1 water bill

let's say you happen to be an owner of a boiled water factory (whatever that is).. then you want $1 profit. right?

now remember, anything extra he pays to gst he can claim back, anything extra he gets from gst he has to pay gahment, so he sells his boiled water at $3.15 - that's $0.15 to gst collected, $0.10 to gst paid, he gives his extra 5 cent earned to gahment. in the end, same profit of $1.

you see, because of this ability to claim; it doesn't matter, when a firm talks about getting profits (nominal, not real) then he can ignore the gst he has paid to the suppliers, and set his price based on the profit he is looking at per unit, and whatever the gst charged, it should just be based on the input BASE price + profit required - whole thing x (1+gst rate); it is simple maths!

but just as azul has so kindly mentioned (and in return for my assimilation of his point, he has accused me of playing with words).. or maybe he meant something else and i have been trying to give a more balanced view of the situation, since PRICE LEVELS have gone up due to gst increase (and all companies can only claim for goods/services related to business), then maybe the owner still wants to buy whatever he has been buying all along to maintain profit, then i have explained the 0.09% thing.

this is a simplistic way of looking at it, but suffice to say, you cannot justify all the humongous price increases that are happening in response to every gst raise and throw it together as a big fault of the gst increase. prices are related to so many factors, some of the simpler ones include supply/demand/inflation, etc.. if anything a 5% jump to 7% jump should not change anyone's life as drastically as most alarmists are painting it out to be.

 

[night86mare]

guess you are the pro, we are the simple minded in viewing economics.

well, you said you gave him numbers, why u only give him half the numbers required to explain why someone increase prices.

if you still dun understand, go ask your director or your boss.

...my kind sir,

we are looking at the gst alone; the poor thing has had so many unfair accusations levied at it, which is why i am SOLELY focused on the gst, since azul started off a side discussion on how the gahment is being very heartless by raising the gst from 5 to 7 % and how it spells doomsday.

if you had read my argument IN THE PROPER CONTEXT, i.e. keeping all things equal and only changing the gst, since it is the gst that he wishes to blame.. then perhaps you will realise that you are the one who has no idea what you are talking about.

p.s. asking your grandpa, grandma, all these, only show a lack of logical refutation ammo, so you have to resort to emotive arguments, which actually only serves to prove your own inaptitude. if my understanding of economics is simplistic, then maybe yours amounts to nothing but hot air, since you have only hot air to show for your statements.

p.p.s. if you had any inkling of what economic models encompass, most of the time they assume ceteris paribus, so that economists can examine effects of a certain factor on the economy, before compounding all to form even more complicated models to carry out their predictions. if you have no idea what ceteris paribus means, in layman terms, it means "all other things equal".

 

[Canonised]

I have to search your past post to show you what you said? you said business cost will not increase because of gst increase.

How could that statement make sense? as company's raw material cost increase so either it will affect bottom line or past the increase to customers.
../azul123

Technically speaking, GST does not affect business cost at all ..... because it is the final consumer who is paying for GST. In an ideal situation, it will not increase the raw material costs, but because of many "dishonest" traders, they jacked up the prices of the raw material and take GST as an excuse ( and ppl like you who is still not clear about the concept of GST has this wrong notion that GST is a cost factor .... in fact, GST is a tax by the government and for the consumers). :think:

 

[night86mare]

Technically speaking, GST does not affect business cost at all ..... because it is the final consumer who is paying for GST. In an ideal situation, it will not increase the raw material costs, but because of many "dishonest" traders, they jacked up the prices of the raw material and take GST as an excuse ( and ppl like you who is still not clear about the concept of GST has this wrong notion that GST is a cost factor .... in fact, GST is a tax by the government and for the consumers). :think:

finally, 知我者也

just when i thought the light was fading and all things were turning black :bsmilie:

 

[azul123]

Technically speaking, GST does not affect business cost at all ..... because it is the final consumer who is paying for GST. In an ideal situation, it will not increase the raw material costs, but because of many "dishonest" traders, they jacked up the prices of the raw material and take GST as an excuse ( and ppl like you who is still not clear about the concept of GST has this wrong notion that GST is a cost factor .... in fact, GST is a tax by the government and for the consumers). :think:

Let me try to break this down for you. Also, don't be fooled by the word play, "raw material cost DOES NOT INCREASE, as a result of gst". Yes the raw material is $x no change I agree, but you used to buy it at $x +5% now you have to buy it at $x +7%, how can that not increase your business cost? we are talking honest trader here and cost will definitely increase, it is so simple.

../azul123

 

[night86mare]

Let me try to break this down for you. Also, don't be fooled by the word play, "raw material cost DOES NOT INCREASE, as a result of gst". Yes the raw material is $x no change I agree, but you used to buy it at $x +5% now you have to buy it at $x +7%, how can that not increase your business cost? we are talking honest trader here and cost will definitely increase, it is so simple.

../azul123

did you read my example to cyrn or not

i quote once again

* Most businesses register for GST to claim back the GST incurred on their business purchases.

* When GST paid exceeds GST collected, the difference can be claimed from IRAS as a GST refund.

* When GST collected exceeds GST paid, you have to pay the difference to IRAS.

* When GST rate increase, it may make business sense to voluntarily register to collect GST in order to claim back GST incurred on business purchases.

if i pay $321 for my raw materials ($300 base before gst)

comapred to $315 for my raw materials (same base before gst) in the past

based on the above quote, i should not worry about the extra $6 and pass it on to consumers

if i was selling my product at $630 in the past, i just sell it at $642 now (both $600 base)

so in the PAST, i collected $30 gst for the gahment, and i paid $15 to the supplier
i end up getting $15 more actually, but based on law i have to give it to gahment. so after balancing accounts, my profits are $630 - $315 - $15 = $300

NOW, with 7% gst, i collect $42 gst for the gahment, i pay $21 to the supplier, i have collected $21 for the gahment net balance, so i pay to gahment. after balancing accounts, my profits are $642 - $321 - $21 = $300

i still earn the same profits, and i do not need to factor in the costs from my profits

now taking YOUR idea, i should just stack $300 on top of what i pay the supplier ($321).. that's $621 and then slap a 7% extra on it.

that's about $665. so i happily tell my customers, price increase, and tada, i pass it on to you, it's gahment's fault.

in actuality? i collect about $44 gst for the gahment, i paid $21 to the supplier.. i collect $23 net.. which i must give to gahment.. so balance already is $665 - $321 - $23 = $321

wow, my profits have increased! i am a happy lobster because i have cheated the people and made them blame the gahment. unless you can point out any problems with the math, then this is solid proof that all things else being equal (i.e. there is not change in raw material pricing, and i do not decide to increase my profit).. no businesses will be affected, since they can generate the same profit because of the claimable portion.

 

[night86mare]

to add on - to explain the point i had earlier which resulted in the accusation that i did not know i was speaking about, i will elaborate in greater detail

in economics, there will be the concept of real money and nominal money. remember that prices change, so $300 today might not be $300 tomorrow, let's say i spend all my money on $2 chicken rice, i can actually buy 150 plates. tomorrow the price rises to $3, i can only buy 100 plates. i have lost 50 plates of chicken rice even thoguh my net salary seems the same.

now, when businesses try to maintain "real profit", i.e. they want to end up purchasing what they used to purchase (all things being equal, i stress once again) before the gst increase.. then they should try to get $300/1.05 x 1.07 profit instead of $300.. since they can only claim back gst for their business operations (when applicable, or pay back when applicable).. this is based on above example.

so that works out to $305.70 roughly, and they might want to jack up their prices by $5.70 on top of the $600 x 1.07.. but it is nowhere near $665 either. so the snowball effect, while POSSIBLY present.. is still a lot less than what is painted by your erroneous assumption. i hope you get what i mean, since i have taken considerable effort to crunch the numbers out.

 

[azul123]

Let me try to break this down for you. Also, don't be fooled by the word play, "raw material cost DOES NOT INCREASE, as a result of gst". Yes the raw material is $x no change I agree, but you used to buy it at $x +5% now you have to buy it at $x +7%, how can that not increase your business cost? we are talking honest trader here and cost will definitely increase, it is so simple.

../azul123

Oh to add-on, what about cost that you cannot transfer to consumer? electricity, operating cost on transport, if you are in industry that uses alot of water, in short operating cost is that not part of business cost? and don't this come with gst?

../azul123

 

[Canonised]

Oh to add-on, what about cost that you cannot transfer to consumer? electricity, operating cost on transport, if you are in industry that uses alot of water, in short operating cost is that not part of business cost? and don't this come with gst?

../azul123

Bro ..... dont mind i say, you are being very hardheaded. All industries, even those listed above, can claim back the GST .... it is the final consumers who will be paying for the tax ... GST is NOT a business cost.:nono:

 

[azul123]

Bro ..... dont mind i say, you are being very hardheaded. All industries, even those listed above, can claim back the GST .... it is the final consumers who will be paying for the tax ... GST is NOT a business cost.:nono:

I think you misunderstood my post.

I am saying the business usage of Power/Water/Telecoms cost increases, these carry gst right? definitely as the consumer the business cannot claim back right? so wouldn't that be operating cost increase? directly due to gst?

../azul123

 

[Canonised]

I think you misunderstood my post.

I am saying the business usage of Power/Water/Telecoms cost increases, these carry gst right? definitely as the consumer the business cannot claim back right? so wouldn't that be operating cost increase? directly due to gst?

../azul123

the concept of GST is very simple, but you have made it so faking difficult :bsmilie::sweatsm:
let me guess what you are saying is that because of higher utilities and other operating costs increase, the amount of GST has also increased proportionately, and consequently, the consumers are technically paying more now. You are not wrong here.
But you are totally wrong if you still insist that GST is a business cost, and that operating costs are directly due to GST. In fact, it is the other way round .....:think:

 

[night86mare]

I think you misunderstood my post.

I am saying the business usage of Power/Water/Telecoms cost increases, these carry gst right? definitely as the consumer the business cannot claim back right? so wouldn't that be operating cost increase? directly due to gst?

../azul123

any business which incurs goods/services with gst charged can claim back that gst from the government, as long as it is registered for gst collection as well

on another note, they must pass the gst they collect to gahment as well

so if you are charged 1.07 times the original price, or 1.05 times the original price, no one gives a flying fish.. in the end gahment give you 0.07 back, or 0.05 back..

like that so hard to understand? :dunno: