Australian treasurers to discuss online shopping tax

Australian treasurers to discuss online shopping tax

Summary: The issue of applying the GST to goods purchased by Australians through overseas online stores will be on the agenda when Federal Treasurer Joe Hockey meets his state and territory counterparts on Wednesday.

SHARE:

Moves to slap GST on overseas online shopping purchases worth less than AU$1000 will be on the agenda when Federal Treasurer Joe Hockey meets his state and territory counterparts this week.

The treasurers will meet in Canberra on Wednesday from 8:30am (AEST) for the Standing Council on Federal Financial Relations, the first since the change of government.

A spokeswoman for Hockey said the meeting will focus on economic growth and ways to increase productivity.

The AU$1000 threshold at which the GST is collected on goods and services purchased from abroad will be on the agenda.

The treasurers will consider potential options on collecting the GST on online transactions if the threshold was to be lowered.

Australian businesses argue that while online shopping from foreign outlets may comprise a small component of the overall retail sector, it's a fast-growing trend being supported by an effectively GST-free status on less expensive items.

The previous Labor government argued that significant reforms were needed within the tax system to handle the job otherwise the cost of collecting the tax would outstrip the revenue collected.

NSW Treasurer Mike Baird said his state had been pushing for reform on the low-value threshold on GST for online overseas purchases for a long time.

"It is about time we had a genuine discussion on the issues that matter and it's clear that under the new federal government this is what we are going to see," he told AAP.

Earlier this month Hockey indicated the government would not proceed with changing the low-impact import threshold for online sales because the business case had yet to be assessed.

The former Labor government reported that based on 2011 import levels of 58 million parcels entering Australia under AU$1,000, the cost of setting up a system to process those parcels would negate the potential gains the government could extract from the extra GST revenue.

The treasurers are also expected to discuss infrastructure partnerships and the economic and fiscal outlook.

Topics: Government, E-Commerce, Government AU, Australia

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

4 comments
Log in or register to join the discussion
  • Internet Shopping

    In typical style, bricks and mortar retailers (& I am one) and Government are set to make far reaching decisions based on absolutely nothing but an assumption of why people are shopping online internationally. The Government is poised to bring in a tax or lower a threshold that will benefit nobody but themselves. Where are the questionnaires asked of buyers as to why they buy overseas and if 10% GST will make the slightest difference? Nobody has bothered to ask me why I make overseas purchases. Gerry Harvey decided that lowering the GST threshold would make a level playing field and the Government looks like going along with it. Nobody has actually bothered to ask buyers for their insights or reasons for buying.

    I don't buy everything internationally. But I do buy certain products often. I buy products not available in Australia, 10% GST will add a burden but will not change anything. I buy products where the pricing discrepancies are more like 100% and 10% GST will not stop that.

    My biggest purchases are books, lots of them. Australian publishers decided a couple of decades ago that Australians should only have access to trade paperbacks and only occasional hardcovers. Thankfully the U.S. & U.K. still sell Hardcover books, so I buy those & ignore the Australian booksellers, Bricks & Mortar or online. A GST will make them more expensive, but generally the costs will still be in my favour. Australia Post will still ensure a book from the U.S. will arrive faster than a book from Melbourne.

    Look at how many bookshops have closed over the last 20 years. Publishers are not in touch with their market. They blame ebooks, but don't embrace it. They say people aren't reading, but don't bother to ask the readers themselves. The Government will see a chance of increasing their coffers, but nothing else will change.
    ianaaa12
  • Internet Shopping

    If retailers and/or the govt think adding 10% GST onto purchases under the current threshold will make a difference, then they are deluded. I have started buying online (overseas) after becoming seriously disillusioned by the prices charged by Australian retailers, including those who sell online. For instance, an aircon air compressor for our Hyundai from a local dealer retails at around $750. Direct from China for exactly the same thing, $202 delivered! Vacuum pack bags for my packing machine? I can buy 5 rolls for less than the cost of 2 rolls at The Good Guys. Shoes? Alegria shoes in the USA... c$60. Here from local stores, or even Algria shoes online, they cost around $140. I'm just sick of being ripped off! It is time for retailers to price items fairly and realistically. I have run a successful business, so I understand the cost of rent and other overheads, but I know a ripoff when I see it. As for ebooks, many cost as much as hard cover books these days. Online purchasing of ebooks is a convenience issue - sit back in yor recliner, choose your book, download and begin reading. I agree wth the previous comment - Australian booksellers really do need to embrace this technology.
    Kerba
  • Internet Shopping

    I agree 10% GST on top of what I pay on overseas purchases isn't going to make any significant difference to what I buy but there could be a more subtle trap here.
    Already goods from Asia take 2-4 weeks to get delivered to Australian addresses unless you pay exorbitant fast freight charges. It appears that these delays occur here in AU; that has to be either Customs or AP. Adding a GST to lower priced items is going to slow that process even more and eventually customers will stop buying from overseas because delivery takes too long. Gerry Harvey wins!
    It may be co-incidental but since the LNP government got in to power items purchased from Asia is taking longer to get delivered; before the election it was 2-4 weeks, now it's 3-6 weeks.
    Makes you wonder.
    presch
  • A duty by any other name...

    As soon as this goes beyond simply charging the GST for overseas purchases and becomes a ploy to discourage international trade via extra fees and tariffs...the line is being crossed to a place where free trade agreements may be put at risk.

    Can Australia afford to be flagged as a country that doesn't play well with others or honor their agreements?

    FYI: Australia is NOT the UK, and doesn't have the same agreements (for example, the UK is not in a bi-lateral free trade agreement with the US while Australia is). I'm sure there are more examples to be found without searching far.
    GlobalEconomy