Just heard on the news that Govt is looking into a task force report that recommends to decrease the GST free threshold for online shopping from $1000 to $30 !!! The task force believes that this move will help the local retailers..
GST Free Threshold for Online Shopping May Be Reduced or Removed
ozshaz on 07/09/2012 - 08:37
Last edited 07/09/2012 - 08:38
Last edited 07/09/2012 - 08:38
Comments
"a recommendation of the Productivity Commission report into retailing" lol
Cant see this ever happening. This has already been suggested and written off as too difficult to enforce. The amount of overseas packages that come though and would need to be checked, would require a lot more staff and negate any cost benefit. Just a typical politician spouting off about something he has no idea about.
And its worth adding that this is a NSW (not federal) government suggestion. A better idea is getting rid of state governments, would save us all a lot of money!
The Labor government needs every vote it can muster. Cutting the $1000 number would hurt lots of people. It would also cost money, unless they put a fee on imports to cover it, which would annoy even more people.
Therefore its very unlikely for Labor to do it - much more likely with Abbott, early on.
Of course the real fix is to get the exchange rate back into balance.
Governments in today's world haven't had power over exchange rates for decades, the market determines this. Attempts to control the rate result in all sorts of worse ills. But if you are thinking of non-interventionary means, the rate is due to other people's woes, i.e. US, Eurozone.
Back to the original topic, if the government is going to be cost-effective doing it, they would have to get the cooperation of big retailers, small fry like Chinese toy sellers are not in the picture. But they would have to fix the price rort we pay for local retailers, that's the real attraction of shopping overseas. Therefore I don't see anything happening, it's just politician hot air.
$30 is ridiculously low.. That's $3 Import Duty. It'll cost $20 in labour just to process it.
If they take it back to $500 (where it used to be in the 90s), I reckon they'd roughly break even.
It's still not going to help local retailers though. The price difference between local and import is generally significantly greater than 10% (even after shipping) and the speed with which Amazon can ship something makes the wait time negligible or even (embarrasingly) faster than getting something sent locally! (I got a full size lawnmower sent from the UK in 3 days! and it was half the price I could buy it for here)
It would suck if the GST threshold is dropped but in the scheme of things i WOULD buy from retailers if they were 10% more then online because I do place a value on shopping experience, getting an item right then instead of waiting a week or so and of cause the satisfaction of Australian warranties.
In reality online shopping is usually 40-50% lower than inflated retail prices (without the haggling) so by reducing the GST threshold would have nil to no effect on the country buying but would cost a unrecoupable amount of money to oversee (essentially) every package that comes through imports and be hassled with all the paper work that follows…yep. I can definitely rationalise 10% extra when I can check it out in person. What I can't rationalise is a 50%+ difference on something that is identical
^^ THIS!
I don't like the idea that I'm going to have to wait even longer for my parcels if customs have to process every one of them to apply the GST.
So how much longer would it take? I've never brought anything for Overseas that was more that $1000 so i don't know.. do they hold your package until you pay the 10%?
I think they randomly check parcels. In my experience, it delays them for a week or more, and when I get them, I can see that they have been opened and then taped back together (badly).
Yes, you have to COD or pay to pick up. it sucks massively
The old argument was that taxing will mean that people buy in stores and retail won't die. This argument is that online will grow anyway so we can raise tax. I don't think you can have it both ways.
Personally I am not against a tax, provided it is done for good reasons and properly.
This. I don't mind the tax, as a consumer you are pretty much obligated to pay the consumer tax anyway (GST in this case). However I wonder whether there's an efficient way for government to collect the revenue without delaying the delivery.
- Always bill the consumers the "declared value" when the parcels go through the custom, email the recipient an unique code to pay online, but dispatch locally without waiting for tax payment (unless there's a track record of non-payment)
- Consumers can see their GST/custom duty liability online, and can bundle up the payment (say, I pay once a month for 20 items I received from overseas).
- Inspect randomly + goods w/o value declaration (which is the slowest part of the process). This would force all large online retailers to declare when they send to Australia.
I had a quick skim of the report, and it looks pretty sensible, they seem to be pushing that Australia Post (for example) becomes responsible for collecting the tax. That is probably also workable.
Well, this doesn't really have anything to do with retail, does it? It's really about collecting GST that is presently lost, since even with an extra 10% on overseas goods, they will still likely be significantly cheaper than the same product sold locally.
Or perhaps they intend on delaying our packages and lengthening delivery time so that Australians will purchase locally.
The report was released yesterday.
http://www.treasury.gov.au/~/media/Treasury/Publications%20a…Also read the Government 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.
http://assistant.treasurer.gov.au/DisplayDocs.aspx?doc=press…These are initiated by the federal government and the NSW government has jumped on the bandwagon bringing it back into the news.
I think they should fund the ABS to keep track of retailers overpricing commodities here in Australia rather than the consumers.
Amazon, The Hut, Zavvi and other retailers get our monies because of the ridiculously low prices they offer compared to what retailers offer here.
If they want the OZ retail economy to boost, they should form a taskforce to enforce fair prices on our commodities
Generally not the retailer's fault, and there is an enquiry into this. It is a very hard problem for the government to solve because they generally can't control actions of companies outside of australia (ie: say that this product you are selling in the US must be made available to Australians).
totally agree, i still pay less with gst for oversea stuff.
generally retail things here are 50% more.They should look at mass quantity to reduce price and competite that way.
Isn't that the main idea behind "Ford", produce more, reduce cost and everyone can have a car! just saying…
You're kidding yourself. Mose well just hand our pays to the goverment and let them do the spending for us. No matter what we do they try and contain it.
No containment at all, purely about applying the existing tax equally. There are plenty of other countries that are much better at actually stopping you from doing things.
If you are against tax, there are some floating anarchist societies I am vaguely aware of.
I thought that if you purchased something over $1000 you had to pay GST as well as other fees?
If so wouldn't it make it very expensive if it was reduced?
So a while back I recall it was INCREASED from $500 to $1000 because customs were processing far too many packages. lolers.
if it drops down to $30 , we create more jobs then lol
OR
our packages get delayed for 3 months
The main thing that has changed is the information exchange on packages and electronic billing etc. The world moves on. Given the direction we are headed it isn't hard to see a (not too) distance future where a very large amount of our products are delivered this way.
PS: Why don't retailers start working like car dealerships?
The government is just money hungry, if they atucally used it properly insteading of wasting it, I'd feel better about it. But mostly it's just waste and agreedy people putting there hands out.
I'm sure they'll be plenty of surlpus in the budget if there's not so much red tape and if it were ran by the ozbargain community lol!
Reducing red tape often also leads to reduced equality in division.
All things like 'reduce red tape' always sound like a great thing, but nothing is a perfect solution.
They do this in the UK, you have to pay to get your parcel released but they also add significant processing fees on top of the tax. And the threshold wasn't huge either like 30 pounds. It definitely made my USA purchase not so cheap anymore and more in line with UK pricing. Your parcel stops they send you a letter, you have to cough up or your parcel gets chucked. It was a hugely annoying process and I guess that is the point.
Stuff is so cheap overseas compared to retail here that you may as well save up and take a trip overseas with a empty suitcase once a year.
Maybe that's what the local retailers/commerce group is gaming on — the deterrent is actually not the 10% GST we have to pay, but the long processing time + dealing with government departments that we need to endure.
This will do nothing for the retail industry, even with a 10% increase the price will still be far cheaper than buying it locally, and I will continue to buy overseas whenever I can find a bargain. The government is just trying to raise revenue for itself. I don't understand why I'm paying a tax on imports if they are neither providing the goods or a service! Plus, I am often slugged VAT or some other local tax in the country of origin, due to sloppy selling on the vendor's side.
You are generalising though.
10% is enough to make not worth opening a new business in certain circumstances.
10% is enough to cause a business to go bankrupt because an online store is 10% cheaper.
Just because certain stores are 2x the price it doesn't mean that all are. In fact I would say that the majority of products in Australia are either the same price, cheaper or only 10% more expensive.
Technically bulk buying and shipping should mean that its fine as it is.
However the bulk buying power should be used to pay for the shop, electricity and employees, something online/overseas stores don't have to do generally.
Also small and new business's have very little bulk buying/shipping anyway.
1&2: I was referring to an increase of 10% on the imported goods. I agree with your statement but that wasn't what I was saying.
3: That's true, but most of the things that I want either aren't available here at all, or are noticeably different in price. Half of what I buy is imported, and the other half is probably food :)I don't follow your agument on point 1&2.
Perhaps though look at this from a different angle: GST is a method of extracting tax from those who might otherwise avoid it (ie: those with lots of money). Simple system, if you buy anything, you have to end up paying tax.
Valid point , but we are already paying our taxes , why pay more
The middle tax bracket is ~ 30% and with most good having GST applied to them, an average Australia would be paying anywhere between 35 - 40% tax
-Bruce_: I think a few people are missing my point, I must not have explained it properly.
If I buy an iPod USB cable from DealExtreme for $1 delivered, adding 10c is meaningless if the equivalent available in shops here is $30. Adding the GST to penalise/discourage overseas buyers won't work. How does adding that 10c to my purchase help Gerry Harvey?
And I agree with easternculture, I worked for my money, I paid 30% to "buy" my money so I can use it on myself, why do I have to pay another tax when I spend it?
And I agree with easternculture, I worked for my money, I paid 30% to "buy" my money so I can use it on myself, why do I have to pay another tax when I spend it?
All governments use a mixture of income and consumption taxes to raise revenue. There is no rule that all revenue has to come from income tax.
Few, if any people would buy overseas for a 10% saving, even if it's 10% saved including shipping (note that import duty is not charged on shipping cost, it's charged on the value of the item.)
The value of local warranty is worth 10%, plus getting to have it now, instead of in a week's time.So according to samfisher5986 where the price is "the same, cheaper or only 10% more expensive" for the "majority of products", such business would be affected by a fraction of a percentage of lost sales. In which case, why are we having this discussion?
Simply because the difference is easily 20% or more (after shipping) for the majority of products that are imported.New business's don't have buying power to compete with overseas stores.
My point is that they shouldn't have to fight against bigger overseas companies as well as an extra 10%.
Its really not obvious how much Harvey Norman buys their products for and how much of it is because of their bulk buying so its hard to know exactly what will happen when twice as many people buy online then they do now.
Hmm, buy a game for $40 + $4 or buy it in Australia for $90. I'll still be importing 10% or no 10%.
purchase all over the world, i can find the most interesting stuffs i want! That is convenience!
never ever never ever never ever never ever go to HN (harvey normans)
funny thing is, even if the threshold was lowered, it would still be cheaper to buy overseas after gst is added
Can they collect GST for digital goods?
The duty free amount in Canada is $20 and anything coming in via post is processed by Canada Post. You pay your taxes (HST/PST) and processing fee over the counter upon collection of your parcel. Really easy process but can get expensive. Most Canadians don't buy outside of Canada because of this but prices for goods seem to be priced fairly competitively in terms of the local wages and standard of living.
Currently in Australia when I import goods valued at more than $1K and it comes in via Fed Ex/DHL I pay the GST and clearance fees while the item is in the air. I receive an email with an invoice - call them up and pay by credit card - and the goods are cleared/delivered right away. Really easy process.
I'm impartial to a change in the threshold and reckon it will take years for the change to take place.
It will happen but not for a while.
They already have a 4yr plan to just gather statistics so we have at least that long.
Then who knows with a change of government there will probably be another 4yr review committee set-up to look at it again.
Possibly when a government thinks they can afford to lose a few votes they might take the gamble.But I think if its not easy to collect and implement, like the Alcopops tax, they wont do it.
And it will probably make as much difference as that tax did.I think there's a reason why there's a 4yr review committee. It's long enough for a change in government, so they don't have to carry it out when they get kicked out and it makes them look good because they're "doing something" to address a "problem".
they will lost money. doing it.
? they will lost money. doing it. ? (Labor supporter?)
In all fairness to businesses paying their share it is about time this gap was closed.
Like everyone who shops on the net & buys from o/s paying more is not ideal but importing
tax free <$1k is a gate that needs to be closed.But don't you think that why people are jumping on the net and buying from overseas rather than walking down to a retail store ? Per my view the reason is inflated prices in retail..if the GST is applied on the online stuff then also i think majority of online stuff would be cheaper than the retails ones..
and by the way JB Hi Fi and Harvey Norman also started doing the grey import to avoid the GST not sure if they are still doing that..
How about fairness to customer? How about fair prices?
Businesses pay taxes however they deduct expenses? How about closing this gap?
Politically, commerce lobby groups will be pulling any chain with the political parties that they can. Ideologically, a tax regime that discriminates against Australians in favour of offshore retailers is a hard pill to swallow when retailers are doing it tough.
Practically, and perhaps in the court of public opinion however, is it worth standing on principle if it means losing both money and voters in the process. For mine, the real issue here is that the local retail industry has been blindsided. Their cozy little cottage industry, hiding behind the protection of traditional geographic barriers and the 'tyranny of distance' has been spectacularly undone by a combination of both Globalisation and the internet revolution. That many sat by and watched until it was all too late and are now crying poor says as much about the local industry as it does about the government's lack of foresight and policy.
It also strikes me though that the big issue here is that the whole cycle is built on a house of cards. Many of the overhead costs for Aust retailers are way higher than their overseas counterparts. Taxes, wages, rents all higher. Whilst we have ignorant consumers paying inflated prices at the bottom to prop it all up the Frank Lowys and Gerry Harveys can keep on buying islands and racehorses and the government can keep collecting enormous taxes to spend on whichever hair brained idea they think of next. When the general population works out that they dont have to do this and takes their money elsewhere, essentially because the country we live in is just too expensive to be competitive internationally, there is nobody at the bottom of the chain paying the bills!!
I reckon it will only get worse. That said, who am I to change the world. I just spent $300 on Amazon an hour ago for some niche sporting gear for my kids (Baseball stuff) that I probably could have bought from a struggling local small business. It would probably have cost me double and helped to prop up that house of cards but why should I be held to emotional ransom to prop up an inneficient chain of bloated taxes, margins, rents, wages and duties.
We just posted this onto our Facebok page:
http://www.news.com.au/money/money-matters/shoppers-can-buy-…
SHOPPERS can keep buying Christmas presents and other goods worth up to $1000 from overseas GST-free after the Federal Government said it would create "chaos at our borders'' to change the rules.
While it admitted this exemption was unfair to local retailers and the threshold was very high by world standards, the government said it was putting consumers first.
It also said any extra GST collected from lowering the threshold would flow directly to the states so if they wanted the money they would have to help pay for the overhaul of processing systems.
Once again, the government is looking to lower the threshold for items bought overseas from $1000 to somewhere around $500. The NSW Treasurer wants it cut to $30. Key fact: The lowering of the GST to $30 (for example) would produce $500M in revenue but cost $1.6 billion to collect.
LOL, postman just arrived with the package from my US mail forwarder, I am sitting here trying on my new Brooks runners, you know….the brand that has blocked all their overseas shops shipping to Australia!!
Clearly Frank Lowy will always get behind something like this, he was on the news the other night talking this up. Anything that takes shoppers away from his Westfield centres and threatens the bloated rents that he charges is going to be opposed by him. Likewise I imagine the various importers and distributors will be screaming foul and racing to their various chambers of commerce to get behind this. They wont care if the government has to pay billions, they just want it all to go back to the way it used to be where all of us numpties out in consumer land just happily trot along to the local Westfield and pay their artificially set going rate for whatever goods it is we want. The local importer and his shop owners make money off the artificially high Aust RRP, Frank Lowy gets his rent, a couple of teenagers get summer jobs in the shop and everybody is happy. Let's build that house of cards back up. They don't care if the government has to pay billions to police it all, they don't care if there is chaos at the mail centres, they just want this horrible online overseas shopping business that they cant compete against (at least not with their margins) to go away. They will be OK with online shopping but only if it done on 'their patch' where they can control it all.
These guys will be lobbying the various chambers of commerce and expect, at some stage a polly and former shop owner of some description to get behind it. Personally I think the stellar rise of sites like Might Ape, 1-Day and Catchoftheday goes some way to proving that you dont have to get the government to change the rules in order to compete. I guess however that it is easier to whinge and have the government do all the hard work and pay all the money than it is to roll up your sleeves! In the mean time I am working on what goes into my next shipment from the mail forwarder!
Great post!
So very true.
So how does this mail forwarder go?
And can you pay with Paypay/CC?
I'm keen on giving it a shot!
Hi Movieman, there is a thread somewhere on here with a listing of all the mail forwarders, there's loads of them. I have used a few, shipito seems popular and there's VPost and a load of others. I use a mob called parcelsforwarding.com I like them bcause I can pay using Paypal, they dont have any ongoing monthly subscription fees (like many do) I think their rates are reasonable (but there may be better out there) and, most notably, they never charge me for storage.
I sometimes buy things sporadically and, rahter than pay 3 lots of international postage I get them to consolidate all 3 bits of US kit into 1 box, that way I only pay 1 shipping fee instead of 3. Most of the mail forwarders do this but many charge you a storage fee if the gear sits there for more than a fortnight etc. I've had stuff on the shelves at Parcelsforwarding for a couple of months, bargains I've seen but I dont need urgently etc and they've never charged me for storage. I dont know if that's their policy or if they are just being nice but it works for me.
parcelsforwarding.com is that there web address? can u trust them?
this is one right i could not have said it better my self.
Looks like the GST on imports is back under review.
http://www.smh.com.au/business/retail/gst-flagged-for-overse…
…and it's still a lot cheaper buying from overseas compared to buying here
I'm going to laugh when retail will be destroyed due to the rise of online shops.What will they blame next after GST is passed through? Joe Hockey will get this approved no mater what - it's a source of revenue for the Government.
You know what we should all do to blow up administration costs?
Buy 1000 x 1c items from eBay, that'll cost them a lot in administration fees to process the GST on those useless items.Joe Hockey will get this approved no mater what - it's a source of revenue for the Government.
Nope, it will cost more than it will bring in. They know that, but it will support local business which might mean jobs and local economic boost, this is what they will be banking on if this change gets through.
Of course there is no way it will get through this senate, and we'll have to see what deals are required to get it through the next senate.
Nope, it will cost more than it will bring in. They know that, but it will support local business which might mean jobs and local economic boost, this is what they will be banking on if this change gets through.
Agreed, however, as you said, it's not going to stop them. Supporting local business which are actually middlemen reselling the same product (obtainable cheaper elsewhere) and not adding any value on, is like putting bandaids on a gushing wound. Retail needs to undergo major changes in terms of pricing and the way they operate.
I'd model online vs retail shops like this.
Fastfood vs Restaurant.
Only difference here, is they're selling exactly the same burger from the same supplier, and the fastfood joint is delivering to your doorstep for a LOT cheaper.
Let retailers work it out or die.
I've got to continually update my skill set and change the ways I do things to keep alive, so can they.
Local warranty means little to me. Just about every time I've gone to make a claim for anything under about $500 the pain outweighs the gain, or they wiggle out of it. Clothes and shoes I've bought from America not only are cheaper but have always stood out in longevity.
Reposting a deleted thread by @dmc900 (duplicate to this one).
I was watching the news tonight and seen that the government is proposing on lowering the GST threshold to $30 for purchasing overseas goods online. Tomorrow Joe Hockey will be bring it up for discussion. This would disappoint all us bargain hunters. Feel free to discuss, personally I would like to see a petition if it could gain as much traction as the NBN petition by Nick Payne the government might consider dropping the idea.
http://news.smh.com.au/breaking-news-national/gst-change-wou…
Won't change a thing, its still cheaper to buy online.
Heck, I will deliberately put confusing info for a $30 package, just to help out the other person who's processing the package. They get extended hours (and pay) trying to solve every package.. on a case-by-case basis, admin cost blowout, make Joe Hockey look terrible.I really don't get this attitude. Sure this isn't the smartest move in the world, but does it really offend you that much to pay tax? Or is it really as bad as ruining a major long term infrastructure project?
This tax is responding to crying retailers. It's just like a tariff for imports.. That's fine and all for protecting Australian manufacturers but by doing this for retail (who are just middlemen), that's not solving the problem where they charge extreme amounts.
I'd like to see markets in Australia move towards the direction of computer parts. There is just so much competition they are forced to not have a massive AustraliaTax after GST is factored in as a comparison to overseas prices.
The consumers are well informed, and smart with regards to comp parts.
I don't see MSY, Umart, PCCG going to TT or ACA whinging about overseas shopping and GST.Other retail businesses need to adapt to the global marketplace, ESPECIALLY retail, since they're selling exactly the same product for 80% more.
Personally I found "screw the government" attitude not all that helpful either. However if the threshold does drop to $30, it would certainly cost a lot more for collection than the money collected. Maybe it would create more jobs at custom / border-control. Maybe.
There would also definitely be less people shopping from overseas shops or grey-importers because of increased cost + shipping delays. Yes it would still be cheaper, but for some it wouldn't be "cheap enough" comparing to shop locally. Maybe the Australian online shops would be the ones gaining the most.
Personally I found "screw the government" attitude not all that helpful either
I see where you're coming from, I didn't vote for the current government, fairly annoyed at this two-party system where it's like two chefs will be cooking for you for 4 years, and you HAVE to choose a set menu, and eat everything up if they get voted in by the others around you. Also you can't negotiate anything with the chefs once they've been voted in, doesn't matter if they cook up a turd, you have to eat it as part of the set menu everyone chose.
And you have the blind voters, the ones that don't even know what policies they're voting for.
The Lib party has gone radio silence for the media (Murdoch may have a hand in that), no news is good news yeah?Meh, just wait and see. Probably after a lot of humming and hawing, they'll lower the threshold to a few hundred dollars, but that will do little to halt the decline of the uncompetitive local retailers.
BTW, more jobs at customs being a good thing is the broken window fallacy.
Related coverage:
http://www.smh.com.au/technology/technology-news/online-shop…