Coalition to drop $1000 GST Threshold for Online Shopping

[AngrySeahorse]

The Coalition are apparently breaking an election promise by planning to drop the $1000 online shopping threshold. The party will be officially over in March 2014 - as that is when they are meeting to make the changes. For me, I've only really got into overseas online shopping this year (I know, very slow to get with the times). A lot of people commenting on this are stating they are not concerned because the 10% GST will not change online overseas shopping as the better $ option. However, others are stating it won't be the GST that is the problem but the customs & duties fees that will blow out the price.

Most people buy online from overseas because they cannot access a particular item here in Australia rather than deliberately trying to screw Australian retailers over.

Interested to know what others thought about this. For or against or 50-50.

Apologies if I should of put this in "suggested threads" but I thought that's only for Rugby specific parts of the forum or whether "politics" is the right place to put this. If there is a better thread for this put it there.

Some articles on this matter below.
http://www.themercury.com.au/news/t...it-treasurers/comments-fnj4f7k1-1226769388350
http://www.brw.com.au/p/business/labor_shopping_abbott_breaking_election_q4HGXgC0ZXdnquloM2FRvN
http://www.businessspectator.com.au/news/2013/11/27/tax/treasurers-eye-online-gst-changes

 

[Braveheart81]

I think the biggest impact on consumers will be the difficulty in paying the GST. Is it going to mean that everyone has to collect their item at the post office and pay the GST then or will there be some online GST payment option that is required before the item is released?

I have no issue with the threshold being lowered. There is no reason it shouldn't be from an tax point of view. The states are massively in favour of it because they get the lion's share of GST revenue so if the GST is broadened then they will be better off.

Favourable AUD, overseas prices and convenience are the biggest reason people shop online. Lack of GST has nothing to do with it as the price of shipping is almost always more than the GST would be.

Personally I think the retailers are pushing for it so heavily because they feel like it will make online shopping slower and less convenient in regards to delivery of goods. I don't think they really believe that having the GST added to the price of items is going to suddenly sway people back to traditional retail.

 

[JSRF10]

Like most decisions in Australian politics IMO, a minority of affected business'/focus groups/health professionals/general "wont some please think of the children brigade" (delete as appropriate) have gone hysterical in the media and the government have pandered to them.

The big surprise is that people are surprised that the new government has renegaded on election promises.

 

[Hugh Jarse]

Have we reached the point where the public service is becoming so lean that we need to introduce another bureaucracy to employ the otherwise unemployable from Canberra to shuffle paper around and feel important that they are making a difference?

A Politician breaking a promise. Quelle surprise?
Normal service has been resumed.

This will just channel money into online importers based in Australia, rather than the traditional Bricks and Mortar based Retailers. Those that have moved with the times and established a decent on-line presence are doing very well thank you very much.

The dinosaurs that are stuck in the 20th century paradigm are the ones squealing the most. Their business model is flawed and they will go the way of milk man, butcher, baker and other tradesperson who delivered door to door off the back of a horse drawn cart.

 

[Bruwheresmycar]

Good post HJ.

IMO the transition has already happened. I used to by all my phone accessories from online dealers in Hong Kong, now I buy the same products from Sydney. The supply chain is adjusting to increase efficiency and this will make the process faster.

What is the deal with Apple and Amazon? Do they import their goods from the USA, or do they host them in Australia? (their digital sales like songs and ebooks). Any interesting implications for them?

 

[AngrySeahorse]

I think the biggest impact on consumers will be the difficulty in paying the GST. Is it going to mean that everyone has to collect their item at the post office and pay the GST then or will there be some online GST payment option that is required before the item is released?

Snip.

Personally I think the retailers are pushing for it so heavily because they feel like it will make online shopping slower and less convenient in regards to delivery of goods. I don't think they really believe that having the GST added to the price of items is going to suddenly sway people back to traditional retail.

When Julia was at the helm she mentioned it would cost more in administration to collect the GST than what the GST charged would bring in. I have no idea how they are going to collect the GST either but I know I'm not keen on the current method employed for parcels over $1000 in value. I have yet to order anything over $1000 but after reading the customs webpage (preparing myself for the inevitable) I am really confused about the whole process - but I guess that is what they are going for.


I laugh at how Gerry Harvey crows about Australian jobs & retailers getting screwed over by people like myself ordering from overseas & therefore should be taxed. What I'd kindly tell Gerry is that like a lot of Aussies one of the reasons I order from overseas is simply because an item is not available here. One example would be the Japanese CD albums I've brought that simply are not available here in Oz & no retailer will even order them in. How exactly am I ripping off local businesses when the item itself was not even available here to begin with? If they want my $ they'll make it available here.

 

[AngrySeahorse]

Good post HJ.

IMO the transition has already happened. I used to by all my phone accessories from online dealers in Hong Kong, now I buy the same products from Sydney. The supply chain is adjusting to increase efficiency and this will make the process faster.

What is the deal with Apple and Amazon? Do they import their goods from the USA, or do they host them in Australia? (their digital sales like songs and ebooks). Any interesting implications for them?

I've only ordered from 3rd Party sellers on Amazon & they all appear to ship from USA. Might be different from Amazon itself rather than the 3rd party peeps. GST has been applied on all my Amazon purchases. It makes me wonder if places like Amazon who already sort out the GST before hand will that prevent the package from being held back in customs if the threshold changes (like the $1000+ items do) or whether the GST will become exempt in that case but the customs duties will need to be applied & the delay will still be there?

 

[The Red Baron]

When Julia was at the helm she mentioned it would cost more in administration to collect the GST than what the GST charged would bring in. I have no idea how they are going to collect the GST either but I know I'm not keen on the current method employed for parcels over $1000 in value. I have yet to order anything over $1000 but after reading the customs webpage (preparing myself for the inevitable) I am really confused about the whole process - but I guess that is what they are going for.


I laugh at how Gerry Harvey crows about Australian jobs & retailers getting screwed over by people like myself ordering from overseas & therefore should be taxed. What I'd kindly tell Gerry is that like a lot of Aussies one of the reasons I order from overseas is simply because an item is not available here. One example would be the Japanese CD albums I've brought that simply are not available here in Oz & no retailer will even order them in. How exactly am I ripping off local businesses when the item itself was not even available here to begin with? If they want my $ they'll make it available here.

Gerry Harvey is a whiner. Rather than adapt his business to meet the demands of a changing market, Gerry sticks to his outdated business model. Then he puts his head in the sand and bemoans the fact that less people are visiting his stores and shopping online.

Even prior to the explosion in online shopping Harvey seemed hellbent on pricing themselves out of the market. Not to mention the service, products, and the whole host of other things wrong with that store.

 

[AngrySeahorse]

Gerry Harvey is a whiner. Rather than adapt his business to meet the demands of a changing market, Gerry sticks to his outdated business model. Then he puts his head in the sand and bemoans the fact that less people are visiting his stores and shopping online.

Even prior to the explosion in online shopping Harvey seemed hellbent on pricing themselves out of the market. Not to mention the service, products, and the whole host of other things wrong with that store.

Testify! Exactly my thoughts!

 

[Inside Shoulder]

Gerry Harvey is a whiner. Rather than adapt his business to meet the demands of a changing market, Gerry sticks to his outdated business model. Then he puts his head in the sand and bemoans the fact that less people are visiting his stores and shopping online.

Even prior to the explosion in online shopping Harvey seemed hellbent on pricing themselves out of the market. Not to mention the service, products, and the whole host of other things wrong with that store.

If I need some electronic gizmodo my wife always reminds me to check JB Hi fi or one of the others: she says, and she's right, that when it comes to the stuff that costs under $1000 (phones etc) he is the most expensive of all the retailers.
And why wouldnt he be? he has to gouge the customers so there is enough fat in there for his poor franchisee and so he and Singleton can run his horse racing venture.
His business model was trashed by the internet so his solution is to ban the internet.

 

[fatprop]

This will cost more in the cost of collection than the revenue it collects

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[redstragic]

This will cost more in the cost of collection than the revenue it collects

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As I understand it though they may charge at the post office for the customs declared value. The way around it is to have the purchases declared a gift? Anyone bought a camera off ebay that comes with a free "gift" . The customs sticker says it is a gift. I can't see it working easily.

 

[Inside Shoulder]

The big surprise is that people are surprised that the new government has renegaded on election promises.

Wrong - the big surprise is the number of broken promises they have managed to cram into about 10 days while still getting the Chinese and Indonesians completely off side.
Theyre giving multitasking a bad name.'

 

[Sully]

Don't worry about the retailers whining. Every time we buy something from overseas the government doesn't get its share of the GST it's lose lose. Less jobs in Australia and less revenue for the services we love. I can see why they need to do something.

 

[Inside Shoulder]

Don't worry about the retailers whining. Every time we buy something from overseas the government doesn't get its share of the GST it's lose lose. Less jobs in Australia and less revenue for the services we love. I can see why they need to do something.

True.
But if we're going to take an insular view it needs to be across the board with a resultant lowering in living standards.

 

[Sully]

Other countries collect tax on internet purchases. How do they do it?

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[AngrySeahorse]

As I understand it though they may charge at the post office for the customs declared value. The way around it is to have the purchases declared a gift? Anyone bought a camera off ebay that comes with a free "gift" . The customs sticker says it is a gift. I can't see it working easily.

This article is from 2011 but its about the crack down on parcels labelled as 'gifts'.
http://www.pcworld.idg.com.au/artic...ay_online_store_purchases_entering_australia/

The customs webpage explains the process for declaring stuff over $1000, it isnt that straight forward. Not something I'd be applying to under $1000. It is something the government will need to sort out.

Wrong - the big surprise is the number of broken promises they have managed to cram into about 10 days while still getting the Chinese and Indonesians completely off side.
Theyre giving multitasking a bad name.'

Yeah, I mean it aint surprising they backtrack on what they say but it certainly has been an eventful week for fuck ups.

 

[Badger]

If Gerry Harvey, his cronies and the retailers etc want to change the threshold, then why don’t pitch in to help pay to manage the collection? It’s particularly ironic Harvey having a bitch when I recall him saying in the mid 2000s that he wasn’t concerned about the internet.

The local retailers are behind the times and are having themselves on if they think reducing the GST free threshold will improve their fortunes. The current retail environment hasn’t stopped international retailers from setting up in Australia. Give the consumer what they want and people will flock to your stores. Look at the likes of Zara and Topshop, they seem to be doing OK in Australia. Granted they may be able to source things cheaper through their buying power, but they wouldn’t have come to Australia to set up “bricks and mortar” stores if they didn’t think they could make a decent fist of it. It’s only going to get worse for the dinosaurs with H&M and UniQlo about to land on our shores.

Reducing the threshold may paper over the cracks, but it won’t stop the growth of local or international online shopping.

What is the deal with Apple and Amazon? Do they import their goods from the USA, or do they host them in Australia? (their digital sales like songs and ebooks). Any interesting implications for them?

Amazon recently set up their Australian domain. At the moment, it's just Kindle e-books and is priced in A$ so prices probably include GST although I couldn't find mention of it. There has been talk that Amazon has been on the lookout for some warehouse space in Australia. But it wasn't mentioned whether it was going to be a sorting facility for overseas orders or if it would be for a full online shopping website.

This will cost more in the cost of collection than the revenue it collects
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That's why I reckon the retailers should help pay some of the costs of administration. Let's see how keen they are then!

 

[Ruggo]

Why buy foreign product online when you can go to Gerry Harvey's shop and buy foreign product.

The man needs his head surgically removed from his backside.

I have no problem with tax being collected on online foreign purchases but Gerry Harvey is as genuine as a vegetarian shark.

 

[Scotty]

This will cost more in the cost of collection than the revenue it collects

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Do you have some details on this statement?