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Low value import parcels: Change needed

The Federal Government has publicly released the final report of the Low Value Parcel Processing Taskforce, which suggested any streamlining of the processes involved in the handling of low value imported parcels – the growth in which is being driven by online retail – would require significant change.

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The Taskforce was commissioned to investigate options to improve the efficiency of processing low value imported parcels following the 2011 Productivity Commission (PC) report into the retail sector, which found the low value threshold for GST and duty on imported goods was not the main factor affecting the international competitiveness of Australian retailers.

The PC did find in its report there are in-principle grounds to reduce the low value threshold but it is currently not cost-effective without significant improvements in the efficiency of processing low value parcels. 

As a result, retailers have called on the federal government – who has not given any indication of when they will respond to the report – to move swiftly to implement recommendations from the Taskforce, which shows significant revenue opportunities in lowering the GST threshold to $100, Australian National Retailers Association (ANRA) CEO, Margy Osmond said.

Osmond said the report showed previous modelling on projected costs and revenue was flawed.

“This modelling shows a cut will raise significant revenue, well over the amount that is spent to raise it, which could earn both State and Federal Governments millions of dollars in additional money to implement the education reforms, the new dental scheme or the disabilities insurance scheme – to benefit our communities,” she said.

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“This is a thorough report which states a clear case for change, there is no need for the Government to dilly dally around with endless committees before making a move, they need to act quickly.”

According to Osmond, regardless of the threshold issue, the system needs to be revamped, including commonsense suggestions regarding improved data collection to shape policy decisions.

“International evidence shows a lower threshold is possible, manageable and effective, will improve border controls that will promote community safety and biosecurity; and streamline parcel processing,” she said.

“We are pleased to see the Taskforce has listened to our recommendations and our concern about the broader impacts of the high LVT to keep consumer spending within Australian shores.

“The Government has lost revenue close to $60million annually from some dishonest overseas retailers providing fake invoices to avoid the GST – all lost to Government programmes.

“The Taskforce makes a clear case for the reduction of the LVT. While it is clear the business case must be developed in full, the impetus is now on Government to move forward quickly, we don’t want to see this become victim of endless consultation before the recommendations are implemented.”

Along with the establishment of the Retail Council of Australia, the Government has recently announced it will commit new funding of $2.1 million over four years to the Australian Bureau of Statistics to keep track of online spending by Australian consumers.

"The Gillard Government is committed to working together with the sector to ensure a strong and prosperous future for retail in Australia," Assistant Treasurer David Bradbury said.

To see the Taskforce report in full, click here.