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BUDGET 2015: Feds squib it on GST loophole

While there is plenty for photo retailing businesses to be upbeat about in the 2015 Federal Budget, moves to ditch the GST-free status of imports under $1000 seems further away than ever.

The ARA's Russell Zimmerman:
The ARA’s Russell Zimmerman: ‘It should be as easy to collect GST from Amazon as it is to collect GST from Netflix and Apple.’

With the GST on imported intangibles not kicking in until July 2017, it seems unlikely that the advantage handed to foreign online retailers is going to be taken back any sooner than that.

‘While this [the ‘Netflix tax’] is certainly a positive step, we must now ensure GST collection is extended to low value parcels,’ said Russell Zimmerman, executive director of the ARA.

‘It should be just as easy to collect GST from Amazon as it is to collect GST from Netflix and Apple, meaning there is little excuse for the Federal and State Governments not to move on collecting all GST on products under $1000 from overseas.

‘State Governments are losing billions of dollars in GST revenue which could support teachers and emergency services in our communities,’ he said. ‘Australian retailers are also suffering from an uneven playing field, and this is costing many local jobs.

‘The ARA has been leading the campaign to fix the under $1000 GST loophole for goods bought from overseas and is concerned that tonight’s budget did not offer any specific remedy to this issue. We do, however, commend Assistant Treasurer Josh Frydenberg on his leading position and commitment to solving this issue once and for all.’

‘It seems the Government has learned from the last year and this budget recognises how the digital economy has changed the business landscape in Australia. What we need to see now is every effort made to strengthen our tax system as well as build consumer confidence with a clear long term plan from Government to support consumers and businesses alike,’ Mr Zimmerman said.

An opinion piece on the 2014 Budget from John Swainston, also gives the Federal Government a ‘Fail’ in being unwilling to move on this critical imbalance between local and offshore retailers.

‘The government has flunked the necessary closing of the GST loophole because it sees this as an unpopular move with electors,’ he concluded.


  1. Col Clark Col Clark May 31, 2015

    It will make no difference with me as far as local retailers are concerned. After I pay a 10% or even a 20% GST on the things I buy overseas I am still 40% or more better off than buying the same product locally. I really hope that it costs the government more to collect my typical $5 – $10 tax than what they are receiving. If the thieving local retailers really want to compete with overseas retailers then they must rethink their policy of 200 – 300 percent markups on the same product.

  2. John Swainston John Swainston August 24, 2015

    Well, it looks as though, on July 1st 2017, we will finally have the level playing field that so many of us have fought for for the past 10 years on GST for overseas purchase. After last week’s meeting of State Treasurers, there is finally national agreement by government at both levels to implement a catch-all for GST on goods and services provided from overseas suppliers to Australian consumers.
    But we have to wait until 2017, because apparently there are two obstacles. The first is that by delaying implementation it enables the Abbott Government to avoid breaking yet another Election promise. The second is that it will take two years for the mandarins of government, to find a way to cost-effectively gather the tax and cajole foreign suppliers into charging it.
    It beggars belief that with the Federal Budget in almost record deficit, the government would allow a delay in collecting an estimated $2B in tax over the next 23 months. But that’s political expediancy and effective pork barrelling for you. This could be implemented in 6 months if the government so chose. It’s irresponsible with unemployment at the mid 6% level that this restructure of the existing tax is not implemented rapidly, based on Canadian and UK methodology that is now well proven. But given political survival always tops the national interest for governments of all colours, that’s the best we can expect.
    It will be interesting if this also applies to returning passengers at major ports and airports. If it does then I hope provision is planned now for the extra space and delays that such payments will require in our already cramped Arrivals halls at airports and harbours.
    As one of the people who fought for this change with The Productivity Commission, the Howard Government, the Rudd Government and many ‘hard done by consumers’, I am glad that sanity is finally being restored, to encourage the level playing field for Australian retailers and the tens of thousands of people employed at retail. Now it’s up to everyone selling goods and providing chargeable services to provide service and range of a level that encourages purchasing locally. If not, people will still buy overseas.

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