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Tax threshold 'won't change web shoppers'

Online shoppers actually have little preference for overseas shopping sites.

Online shoppers actually have little preference for overseas shopping sites. Photo: Phil Carrick

LOWERING the tax-free threshold on goods purchased online will do little to change Australian's shopping behaviour, according to research by MasterCard.

Just 18 per cent of 1250 respondents to a study conducted on behalf of MasterCard said they ''would be more inclined'' to shop at local sites if the GST threshold was lowered from its current level of $1000.

Among the online shoppers surveyed, 38 per cent said a change to the threshold would have no effect on their behaviour while 24 per cent said any move ''would only cause them to buy less often''.

MasterCard executive David Masters said the results indicated that changes to the GST threshhold were ''not enough to substantially change the shopping behaviour of Australians''.

This is despite the fact that - all things being equal - most survey respondents expressed little preference between overseas and local online sites for a wide range of popular goods. For make-up and clothing accessories, only 9 per cent of respondents had a preference for overseas online retailers. Around 57 per cent said they were not concerned whether the vendor was local or overseas.

The most significant bias was for book-buying, with 16 per cent of respondents expressing a preference for overseas vendors.

The big swing factor was, of course, price, with 86 per cent saying they preferred to buy from overseas sites due to the fact it was significantly cheaper. A better range of goods was another reason given by 62 per cent of respondents when asked why they preferred overseas sites, but they were also preferred for ease of navigation and for offering better information about a product or service.

The survey did not take into account extra charges that would apply to popular online purchases such as clothing and cosmetics.

According to research from Macquarie, applying both GST and duties to clothing would raise online prices by 21 per cent. The cost of cosmetics purchases online would rise 15.5 per cent, which ''eliminates much of the existing price discrimination that exists'', Macquarie said.


  • There is also another factor - many overseas businesses have a habit of writing invoices to indicate prices under the tax threshold to help their customers.

    So I would suspect if the limit drops to, say, $100...there will be a massive spike on imported goods that cost $99 ;-)

    Date and time
    January 23, 2013, 10:30AM
    • Customs had a lot of experience with the car parts industry about 30 years ago. They had a lot of people bringing in Hot Rod parts, cars etc with fake invoices, They went our and got the manufacturers catalogs to check all the invoices. Now they can easily look up the prices online themselves. If you've undervalued your goods, they can confiscate them. In some cases, say if you've legitimately bought a desirable item at a real bargain price, they can still charge you duty in the real value of an item, not what you legitimately paid.

      John Holmes
      Date and time
      January 23, 2013, 1:36PM
  • I tend to to do all my shopping online overseas due to the fact that its significantly cheaper and offers a much larger selection and any the introduction of GST on online shopping will not change my shopping habits one bit. The paradigm shift to online shopping overseas will continue as long as Australian retailers don't become more competitive. Shopping online overseas is simple and there are many informational sites such as which make it more accessible then ever. for me the choice is clear with or without GST..

    Date and time
    January 23, 2013, 11:05AM
    • Hear hear. Until Australian retailers start paying their staff lower wages and commercial property owners start reducing their rents, so that prices of goods can be reduced, I will be sending all of my money to overseas economies.

      I think by sending all my money overseas there is no possibility of any negative impact on Australia.

      Mr Stiff
      Date and time
      January 23, 2013, 11:57AM
    • Obviously mrstiff doesn't understand that problems for our economy are caused by the importation of goods not where they are purchased. Paying triple the price for an imported item just because its an Aussie company your buying from is pointless, you might as well just send free money to australian companies. We can all play pass the parcel with our money for a strong economy. Our companies need to get competative instead of expecting us to make ourselves poor so they can have jobs. I love aussie products and will pay more for them but I am not paying Aussie importers exorbitant rates to import what I can import myself.

      Date and time
      January 23, 2013, 12:49PM
  • Quite frankly I get tired of hearing about this issue. Retail is a waste of labour. People should be upskilling and getting real/productive jobs, not idling behind a counter at Harvey Norman (or wherever).

    Date and time
    January 23, 2013, 11:15AM
    • The only reason there is no GST on imports is an attempt to buy off voters with a free ride.

      With modern IT systems there is absolutely no real cost burden to collecting GST on imports above 20 dollars.

      99% of parcels have a detailed bar code on the weighbill that can contains all sorts of information. All parcels coming into Australia must contain a declaration of value. In many cases this information is already included in the bar code.

      It is a simple matter to scan this information and generate a GST bill that is sent as a separate item to the addressee. And like almost any other bill we get in the mail for ultilies and telcos etc it can be post paid after receiving the goods.

      It's time this growing leakage of GST revenues was plugged by Canberra and the revenues onsent to the states to pay for our schools, hospitals, roads, police, and all the other frontline services state governments have to provide to us all.

      Gillard and Abbott should work as a team on this one and just get it done by July 1.

      Tax Time
      Date and time
      January 23, 2013, 11:17AM
      • maybe local retailers need to realise it's not all about the price and the GST. I tried to buy a pair of runners of a well known brand, and tried 5 different stores, none of which had my size. They were $220 in Australia, and I was able to order them from the US and get TWO pairs (two different colors) for $235 - delivered in under 5 days. I would have been OK with buying them locally, but nowhere had stock.

        Date and time
        January 23, 2013, 11:37AM
        • What I like about online shopping overseas is:

          1. lower prices

          2 you don't have to suffer the noise (some call music) while you sample/choose a book that Australian shops insist on blasting.

          Date and time
          January 23, 2013, 11:38AM
          • You could put a 50% tax on online shopping and in most cases still be well in front. I was looking at purchasing an outboard motor propeller from the local distributor, 2km's from my home, last week and could do so for $425AUD, I could buy the same propeller shipped from USA for $150AUD. For as long as we continue to get reamed on local purchases I will continue to spend my dollar elsewhere and if that happens to be outside Australia so be it!

            Date and time
            January 23, 2013, 11:50AM

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