The retail workers union has thrown its support behind retailers’ call for GST on all imports, as Customs admits it has no evidence to justify the $1,000 threshold.
The Shop, Distributive and Allied Employees Association has told a public inquiry that current GST arrangements put ‘bricks-and-mortar’ retailers at a disadvantage, calling for GST on all imports regardless of their price.
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Currently, imports of less than $,1000 are exempt from GST, with retail giants such as Myer lobbying the Government to remove the threshold as online shopping becomes increasingly popular.
While the union says the impact of online shopping is hard to measure, the current tax threshold serves as an added incentive for consumers to purchase GST-free imports at the expense of traditional retailers.
“The Government should impose a GST on all overseas purchases. This would mean all goods purchased in Australia, whether from Australian or overseas suppliers, would be subject to the same tax regime,” the union said its submission.
The retail industry is Australia’s biggest employer, accounting for more than 10% of all jobs.
Earlier this year, the union’s national secretary Joe de Bruyn accused large retailers of exaggerating the impact of online shopping, but has since done a complete back-flip, arguing GST should be imposed even if it increases administrative costs.
Meanwhile, the Fair Imports Alliance says it received an email from Customers officers stating: “Customs and Border Protection has not undertaken analysis of which threshold level will be administratively feasible.”
Fair Imports Alliance spokesperson Brad Kitschke says the admission proves that previous government decisions, to maintain the threshold at $1000, were made without any factual basis.
“The Government, from the Prime Minister down, has said it cannot lower the threshold because it would be economically or administratively unfeasible,” Kitschke says.
“It is staggering to think a government agency like Customs cannot implement an efficient system to collect this revenue and even more impossible to understand how it advised the Government that something is not economically feasible to undertake, when they have never carried out any modeling to prove so.”
The FIA says industry has been left “waiting for answers” ahead of the May 20 deadline to submit to the Productivity Commission’s review, resorting to Freedom of Information requests to obtain information.
Prime Minister Julia Gillard has downplayed the impact of online shopping on traditional retailers, stating earlier this year that overseas websites generate a “very small percentage” of retail sales in Australia.
According to the Australian Bureau of Statistics, retail sales fell by 0.5% in March despite predictions of a 0.5% rise.