$5 parcel tax: warehouse workers sorting packages on conveyor belt


The federal government is not planning to introduce a $5 tax on low value items imported into Australia, according to Home Affairs Minister Peter Dutton.

Last week Fairfax reported on a Department of Home Affairs discussion paper it had obtained, which revealed a potential plan to impose a flat fee on all parcels imported into Australia worth up to $1,000 each.

These low value packages represent 90 per cent of deliveries entering the country, equalling some 38.7 million parcels in the last financial year.

This was up 22 per cent on the previous 12 months and the Department predicts the number will increase by a further 31 per cent over the next four years, compared with only 10 per cent expected growth in high value parcels (over $1,000).

According to Fairfax, the Department was considering the fee to cover the costs of screening the packages. Delivery service providers said the cost would likely be passed on to consumers if it went ahead.

However, Dutton told the Nine Network the government would not introduce the tax.

“There is speculation around at the moment. We have said we’re not going to do that in this budget,” Dutton said on Sunday.

Parcel tax impact ‘very minor’ for local retailers

Associate Professor Gary Mortimer from the Queensland University of Technology Business School told RetailBiz the introduction of a $5 flat fee would have had little to no impact on domestic retailers.

“Last year about $26 billion was transacted through online channels and of that around 80 per cent was spent domestically, we’re really only seeing 20 per cent of the money coming from overseas…

“It’s such a small proportion of that online spend that it’s immaterial… The sales it would create in Australia are very minor but the inconvenience for consumers is significant.

“Consumers would be up in arms over such a blunt measure but what’s the impact on domestic retailers? Very minor.”

The National Retailers Association CEO Dominique Lamb said it was important to look for measures like the parcel tax that could help level the playing field for local retailers, who may have higher operating costs than their international counterparts.

“The world is getting smaller through technology and through capital mobility, and the challenge for Australian retailers—who collectively employ more than a quarter of all employed young people in this country—is remaining competitive against foreign giants who are not subject to the same operational costs,” she told RetailBiz.

The parcel tax debate comes after it was announced last year that GST will be extended to include low value imports from overseas as of 1 July 2018.


Sign up to the RetailBiz newsletter.