The push to reduce the GST import threshold has received a boost thanks to the election, with Coalition-controlled states now pushing for a change in the tax rate.
And while the Coalition has already said it won’t make any change to the GST at all – at least within the first term of government – the head of the largest retail lobby group says he’s “hopeful” of a change.
“We’ve spoken to both sides,” Australian Retailers Association executive directly Russell Zimmerman told SmartCompany this morning. “We’d be hopeful that whoever gets into power, they’d do something about it.
“We’re looking for something to happen fairly quickly, and we’ll be supporting the states. Mike Baird has been somewhat of an evangelist on this topic…and quite frankly, we’ll be looking for the GST to be dropped by 50% immediately and pushed down below that.”
New South Wales Treasurer Mike Baird – who has been a strong advocate for dropping the GST threshold – told The Australian Financial Review the threshold should move from its current level of $1000 to between $100 and $200.
“All the states are on board and the work being done on this should be completed by December,” he said.
Several reviews, including a study by the Productivity Commission, have recommended the threshold be dropped as one of several measures. Others include reforming the current customs department.
Baird said the higher tax, which he estimates could generate $2.5 billion by 2016, could be collected at the point-of-sale.
“Only a few companies account for a large proportion of sales,” he said. “I think if we can get federal agreement on legislation we can have this in force by December next year.”
Victorian Premier Denis Napthine said Victoria supports a change to the threshold.
Although Abbott has said a Coalition government would include the GST in a broad tax review, he has also committed there won’t be any change to the tax system during the first term of government.
But Zimmerman seems more confident of a change.
“I’ve got no insight into what the government or opposition is planning, but I believe the government has a sympathetic ear, and I believe the Coalition has a sympathetic ear.”
A recent study by MasterCard revealed the majority of Australians won’t change their spending patterns if the threshold drops.