Shopping online: so much more than GST

Shopping online: so much more than GST

Summary: If the controversy in Australia over GST on products bought from overseas websites signifies one thing, it is that e-commerce and online shopping has finally arrived.


If the controversy in Australia over GST on products bought from overseas websites signifies one thing, it is that e-commerce and online shopping has finally arrived.

New Zealand might not be an e-commerce trailblazer, with just 3 per cent of overall sales online, but the country is playing catch-up: nearly half of retailers are already selling online and a further 40 per cent are considering it this year.

Given this, retailers, consumers and government had better be prepared for the explosion to come!

It's not just a matter of GST on overseas sales, but tidying up the legislation department in general. At present, it looks a bit messy and potentially confusing.

Certainly, it does seem unfair that domestic retailers must charge tax on their goods and services, while overseas retailers are exempt.

It also seems unfair that domestic retailers have to keep up with different consumer protection laws, while overseas retailers are exempt.

In New Zealand, while consumer protection laws generally make no distinction between an item sold online or in a store, rules can carry over. For example, there are different regulations for buying at an auction or buying something for a fixed price.

This means for online that consumer rights differ if they click "buy now" as opposed to waiting for the auction price.

Of course, other countries have their own rules.

In Britain, for example, consumers have extra rights when buying online. They have a seven-day "cooling off" period, which allows them to return purchases as long as it remains saleable. But whether this applies to Kiwis and Australians buying from UK sites, I do not know.

Online sales seem to be bigger in the UK than in Australia. They're certainly much more popular than they are in New Zealand. Christmas Day saw one in 12 Brits shopping online!

Despite the online boom, even the UK retailers seem confused. Some only recently discovered they must refund postage costs for returned goods, not just the cost of the item.

It just goes to show that most countries could probably use a bit of certainty.

Currently, there is a Consumer Guarantees Amendment Bill working its way through the New Zealand Parliament, which might clarify the rules a little.

Yet, one country's approach won't solve the international mess. We talk about standards a lot in technology — things would be a lot easier if the rules for online were all the same in regards to consumer protection. Even if those rules are "buyer beware".

As for the duties and GST: it seems to me there's little point reducing the thresholds such that it costs as much to collect the money as would be received. New Zealand has been down this route already, which is why it recently abolished Gift Duty.

Topics: Government, Browser, Government AU, Enterprise 2.0

Darren Greenwood

About Darren Greenwood

Darren Greenwood has been in journalism, not all of it IT, since the days of typewriters and long before the web spun its way around the world.

Coming from Yorkshire, he can be blunt, and though having resided in New Zealand, as well as Australia, for quite some time, he insists he is not one of the 'sheeple!'

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  • Everyone should pay GST regardless of country of purchase. However, if a product can be sold cheaper after the 10%GST then this over time will change our current approach to running a business. What really gets to me is the utter gread and the need for so many folk to get everything that open and closes. God help us humans because we are bloody hopless. Lets inplant Ipods into babies at birth.

    Mick W
  • I can't get over the reaction of some of the online community to being confronted with the idea they might have to pay a tax that all other industry or businesses pay.
    Everyone seems to forget its the bricks and motar businesses that create the jobs,pay for annual leave etc and- oh yes,put wages in peoples pockets to actual have the money to waist- I mean buy online items.
    I would suspect most of these detractors online got their start in the workforce via working in a small business and now all of a sudden its wrong for a business to make a profit. God help us all ,
  • I can't believe there are still country hicks who believe shopping online is about GST avoidance.

    Yesterday i saw this Sony 46 LCD TV on Ebay. It retailed 1600 by an *Australian* seller which said the TV comes with 2 years Warranty of which 1 year is ON SITE by SONY. The same TV retails for more than 2500 at Harvey Norman and probably 2000 at JB-Hifi.

    Because the purchase would be more than 1000, I would have to pay $160 GST on this purchase. The point is I am still better off purchasing online than at Harvey Norman.

    This is the reality today. Retailers like Harvey Norman killed local manufacturers by purchasing their goods from China. They rip off the Australian public with their questionable sales tactics and mindless drones who wander their stores. Rather than putting up with it people shop smartly online - GST or not.

    GST is an "Australian" goods and service tax for items purchased in Australia. This is why GST gets refunded if you take the goods out of Australia ( Tourist Refund Scheme ). So why should it be charged if you purchase the goods outside Australia anyway ? You are not getting service within Australia. If Harvey Norman can get this benefit, why can't us ?

    Second, it is very very difficult for ATO to keep track of every single purchase and that is why they set the threshold. Rather than trying to collect GST on purchases below 1000, we should get ATO to do an audit on all our retail industry billionaires and see how much tax they have been avoiding.

    How dare Gerry Harvey call us "unAustralian" when people like him are the ones who put Australian manufacturers out of business and thousands are jobless because of shonky business practices.
    Azizi Khan
  • re "How dare Gerry Harvey call us "unAustralian", when people like him are the ones who put Australian manufacturers out of business, and thousands are jobless because of shonky business practices."

    Spot on Fred............................................and I think Gerry Harvey realizes it now. But being the consummate con artist, he will never admit it. I for one, as a sales consultant in the IT Industry, know first hand how difficult it has been to compete in the past with top quality more expensive products, against some of the cheap imported stuff that Harvey Norman has been selling, and with nothing like the after sales service, and back up that I have had to offer. (Poor old Gerry, maybe we should open a Nationwide Save Gerry Harvey Fund !!!)
  • Ready to fall over Wally, I agree with you mate...! 100%.. See I'm not the one whose hard to get along with, LOL...!

    Big business have for years used the "global economy" as an excuse, to "their" advantage and to our detriment.

    They want to be able to import at next than nothing, from abroad and re-sell to us at top dollar, so that they can make obscene profits, at our expense.

    Then to rub it in, big business then want to sack us all (said generically) and outsource our jobs to those who are paid pittance abroad, so that they can make more obscene profits, at our expense.

    When we say enough, we will buy elsewhere (at your expense) they then have the audacity to complain and again want to hold all the trump cards...!
  • I agree to both the sides of argument.

    As a buyer I have all my rights to buy it cheaper from wherever I can source it. The same as retailer sourced it cheaper from overseas dumping local manufacturers.

    But hey are we for real here do what exactly they have done to us? This will than become a cycle. Tell me this thing what if Gerry Harvey and his billionaire team decides to shut down the shops here and start up an online shop, recruit some $1 a day cheap labor in China / India to assist people with online sales. There goes Gerry is now even more richer the retail industry is dead. We already have dead manufacturing so what are we left with just dig the mines and sell minerals to the world (Not a bad Idea huh!!!)

    Guys I agree we are being rip off by this retailers big time. But this online business is a short term answer to them we need to think this in big term. May be create a consortium of people to fight against this big retailers by setting up low cost shop fronts same as Harvey Norman / Meyer / David Jones.

    God Bless Australia from this retail war.
  • @naiknb, it's not just the big retailers who have been making their goods expensive.

    We need to look at the whole channel from arrival of goods in Australia to identify where the costs build up. Some years ago it was pointed out that it cost more to get cargo across the wharf and into storage than it did to bring it from Japan, US etc.

    But there's no doubt that the present retailers' campaign was pretty bone-headed, because all it achieved was to highlight how much could be saved online. And the addition of GST to online buying would only be a small part of the difference.
  • Guys if a product can be sold cheaper after the 10%GST then this over time will change our current approach to running a business. Addition of GST to online buying would only be a small part of the difference.
    value spotters