Following Gerry Harvey’s comments to bring the GST threshold on imported goods down to apply on products worth less than $1000, Choice says it would be “poor policy’.
The consumer group says the increasing amount of goods purchased overseas through online and other channels is about new forms of competition and the appreciation of the Australian dollar rather than tax rules.
“The main driver of competition now affecting the bricks and mortar retailers is much more to do with the take up of new technology and the way it liberates consumers from traditional ways of shopping than anything to do with the GST or the exchange rate,” Christopher Zinn, Choice spokesperson said..
“Some retailers have decided not to operate online, and their decision should be judged in the marketplace. It should also not be forgotten that a higher Australian dollar reduces costs for local retailers as well."
“Unless there’s overwhelming and immediate evidence of widespread detriment to competition in the retail sector, especially the impact on smaller shops, we think it’s too early to consider change.”
Similarly, eBay has said if the threshold is lowered, retailers would only be punishing consumers and should therefore embrace online instead.
According to eBay and Australian Bureau of Statistics (ABS) data, over a 12 month period ending 30 September 2010, Australian-based sellers on eBay have experienced growth this year, almost 10 times retail growth over the same period.
“We can’t understand why some retailers would seek to attack the consumer, when the answer is to simply get online,” Deborah Sharkey, eBay Australia & New Zealand managing director, said.
In February this year the Board of Taxation, after reviewing arguments on this issue, came to the conclusion that it is “not administratively feasible” to reduce the low value import threshold.
The Board also noted there were other costs involved with importing online goods that diminish some of the savings such as the costs of shipping and handling and some risk in terms of warranties, after sales service and the potential non-supply of goods for which payment already has been made.