'Lift your game' retailers say to government ahead of GST threshold meeting

A lower GST threshold on imports won’t happen, “full stop, end of story”, according to Prime Minister Tony Abbott in August, but the push is still on to broaden the application of the 10% tax.

Local retailers want offshore imports to be taxed like goods bought in Australia. Currently, imported goods are only taxed under the GST if they cost more than $1000.

State treasurers will meet tomorrow in Canberra with Federal Treasurer Joe Hockey to see the results of a report on changes to the GST, commissioned last year. An official in Hockey’s office said no decision was expected tomorrow.

The National Online Retailers Association chairman Paul Greenberg said there was “strong argument” for the threshold to be lowered, but “if retailers use this as a smokescreen for not keeping up with the pace, I think we’re doing ourselves no favours as an industry and we’re doing the customer no favour”.

NORA called on Australian e-commerce sites to extend into Asia and further worldwide to grow, and to use technology to improve customer experiences.

He said retailers need to “lift the bar a lot more than 10% to earn the Australian shoppers’ custom”.

Hockey has said in August that any changes to the GST need consent from all states and territories, and would be put up for debate before an election.

The opposition infrastructure spokesman, Anthony Albanese, said today Labor would oppose any “extension” of the GST, wrote Business Spectator.

Melbourne University public policy fellow Nicholas Reece told SmartCompany the issue was a “political dance” where politicians don’t want to risk a “backlash” from proposing higher taxes.

“It seems that there is a consensus that has emerged between states and the Commonwealth that online, offshore retailing is an area that needs to be examined, and it looks as though there is going to be a move to lower the threshold,” he said.

“What we’re now seeing however is a political dance as to who will be seen to be responsible for that and who will wear the opprobrium of online shoppers, to the extent that that exists on this issue.

“The government needs to be certain that the additional tax it collects is not outweighed by the admin burden for domestic consumers and online retailers through a lower threshold.”

What the key player’s said:

Joe Hockey, press statement August 7, 2013:

“Any suggestion that the Coalition wants to change the GST is just yet another Labor lie.

“The GST can’t be changed without the consent of every single state and territory, including the Labor-run states.”

Minister for Small Business Bruce Billson, in AFR, Sept 20, 2013:

“There is a need to consider the tax framework that supports our nation.”

Tony Abbott as opposition leader, ABC, August 13, 2013:

"Let me be as categoric as I can. The GST won't change, full stop, end of story."

This article first appeared on SmartCompany.