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No GST change on foreign goods just yet

Date

The federal government has acknowledged the $1000 threshold at which GST is collected on goods purchased from abroad is high by international standards, but has rejected calls for an immediate reduction.

Instead, and in line with the taskforce that analysed the so-called "low value parcel processing", Labor will begin preparing business cases and possible implementation plans for reform, with a final response to be released in 2013.

"A decision cannot be made regarding the possible lowering of the threshold until these business cases and possible implementation plans for reforms to low value parcel processing have been prepared," Assistant Treasurer David Bradbury said in a statement today.

He said the costs associated with any possible changes had to be determined.

"As the taskforce's report made clear, there are no simple or quick solutions," he said.

He said around 58 million parcels entered Australia under the low value import threshold each year.

As such, lowering the threshold before putting in place significant reforms to processing capabilities would cause major disruptions to the international mail service and result in major inconvenience to the businesses and consumers that rely upon it.

"Without greater efficiencies in the system, the cost to taxpayers of collecting the GST on low value parcels would also outstrip the revenue that is collected," he said.

He said online retail sales, both domestic and overseas, still only accounted for around six per cent of overall retail sales.

"While there has been strong growth in online retail sales, published data indicates that the majority of sales are made with domestic retailers, with online sales by international retailers accounting for less than 1.5 per cent of total Australian retail sales revenue," he said.

"While this is not the biggest challenge confronting the retail sector, the government does recognise that on the basis of fairness and tax neutrality, Australian retailers should not be disadvantaged by taxation arrangements which favour overseas retailers."

AAP

11 comments

  • One thing that no-one seems to question related to tax is duty-free purchases - I guess the retailers don't complain because they are getting business (especially since you have been allowed to buy stuff in a normal shop and claim the tax back at the airport) but the government is losing revenue.
    Whilst I have benefited many times, it seems unfair that those rich enough (or lucky enough) to travel overseas can buy stuff cheaper than those who stay at home!

    Commenter
    MrDog
    Date and time
    December 03, 2012, 1:22PM
    • have you seen the discount on Duty Free these days?? it isnt worth the paperwork. Your not missing out on *ANYTHING* compared to 20yrs ago.

      Commenter
      Davo
      Date and time
      December 03, 2012, 2:08PM
  • Any changes to the $1000 threshold will not make a difference to people's purchasing behaviour at overseas merchants. Australian retailers seem to believe that this is the main reason for the decline in their businesses. I am expecting 11 parcels from overseas this week with no single parcel with a value of over $120. Every time I have attempted to shop at an Australian retailer, I am met with terrible customer service and arrogant attitudes, as if they are doing me a favour, that I soon regress back to online shopping. I will now only buy from the Australian retailers only as a last resort.

    Commenter
    Comms
    Date and time
    December 03, 2012, 1:43PM
    • What incentive is there for me to go into a store and pay 500% or more for the same item - the exact same item - online? How about this - instead of punishing the public, the Australian retail sector should try and come up with a way of being more competitive.

      Commenter
      SG
      Location
      Melbourne
      Date and time
      December 03, 2012, 1:44PM
      • The most competitive retail would not have any staff, except those fulfilling orders. Also, there would be no 'Shop' with expensive rent. They may have some customer service staff, but not in the way that the current retailers are. This is essentially the setup for online stores. The current retail setup really isn't sustainable going into the future as businesses look at cutting the overheads so they can maintain their profits while keeping the prices at what customers accept paying.
        It's unfortunate, but those currently working a 'sales assistance' really should look at upskilling to areas that will be in demand in the future as the decline in demand for them is likely to continue until there are very few positions left for them.

        Commenter
        AM
        Date and time
        December 03, 2012, 2:09PM
    • MrDog - are we looking to introduce a communist society?

      I think Comms said it all - how many of these purchases are over $1000? And even after slapping on GST, with the strong $A, I expect that overseas purchases may still end up being cheaper. Also, you don't have to deal with poor customer service.

      Commenter
      clearly
      Date and time
      December 03, 2012, 2:02PM
      • Not at all - but duty free is basically a benefit to the better off and I have yet to find anyone who can explain - other than so airports can be turned into shopping malls - why we have it. As I said - I have benefited frequently but there is no logical reason for it to exist.

        Commenter
        MrDog
        Date and time
        December 03, 2012, 2:15PM
      • @ clearly

        Sadly we're already a communist society. George Orwell tried to warn us with his "Animal Farm" and "1984" but those with any brains have been whipped into submission.

        It's attitudes like those of MrDog that ensure that the whinging lot keep demanding from the "rich" and "lucky" enough. Did you know that apart from Harvey Norman, ex-Labor Premier John Brumby is pushing to introduce it, as well as calling for changes to the GST?

        Commenter
        rrr
        Date and time
        December 03, 2012, 2:40PM
    • You or any of your mates will laugh no more when you lose your job because things or labour are cheaper overseas.

      Commenter
      Sin Fong Chan
      Location
      Wheelers Hill
      Date and time
      December 03, 2012, 2:40PM
      • Service is such a huge factor, not only price, that I don't understand why bricks and mortar shops continue to act as though you are lucky when they serve you, including owners who surely have a more vested interest. I love a cheaper price, yet I will pay more for good service than I am likely to ever pay more, or even cheaper prices, when poor service comes with it. I can understand why certain retailers are blaming the GST, yet surely if they make promises to offer better service instead and then actually follow through, that will get more shoppers on their side. Target's online store recently took around 10 days to respond to an email regarding an error in their shopping process, in which time I was unsurprisingly not in the market to buy the items still. They are big enough and should be smart enough to offer live chat and excellent email service, not whinge about GST payments.

        Commenter
        SamSam
        Date and time
        December 03, 2012, 2:43PM

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