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With GST the talking point in NSW at the moment here is another timely article from The Age.
Deborah Gough
Published: September 9, 2012 - 3:00AM
A GOODS and services tax on overseas online purchases will make Australian retailers only slightly more competitive, and will not be the adrenalin shot needed to revive local shopping, analysts and retailers say.
A federal taskforce study has given support to lowering the $1000 threshold on GST on imported goods, saying the cost of collecting the revenue may not be as high as previously suggested by a Productivity Commission report.
But, said Deakin University lecturer in consumer marketing Michael Callaghan, shoppers who bought from overseas websites would not be deterred by a 10 per cent rise through the GST, because they often saved up to 50 per cent.
''It is not going to alter shopping behaviour, that will just continue,'' Mr Callaghan said. ''If they do their sums, if it was 10 per cent less they [consumers] would probably go to the local shops for it, but anything more and they will continue to go where it is cheapest.''
A National Australia Bank study released this month showed international online sales made up only 28 per cent of total online sales; the rest were from domestic retailers.
In the year to June, the NAB Online Retail Sales Index found, traditional retail spending was at $220 billion while online retail spending was at $11.7 billion.
Australian Retailers Association chief executive officer Russell Zimmerman agreed that lowering the GST threshold was only part of the problem for local retailers.
''It is not the silver bullet, there are three or four other barriers to more competitive pricing for Australian retailers,'' Mr Zimmerman said.
Wage rates for local shop assistants that were higher than in other countries and the cost of retail space were two of the factors that most affected the price of goods in shops, he said.
Mr Zimmerman pointed to Morgan Stanley research released in July that showed retailers paid up to three times more per square metre in rent than for comparable space in the United States.
The study into the GST threshold by the Low Value Parcel Processing Taskforce was released last week by the Assistant Treasurer, David Bradbury.
The taskforce estimated that if the threshold was lowered to $500, it would cost $20 to collect $60 in GST revenue per item, on average.
If the threshold was lowered to zero, the cost would be $12 for a $7 GST return per item.
The government has not responded to the recommendations but told the ABC that any change would affect Customs and Australia Post and freight companies.
''Even if we pass a law and say you have to register for GST, the difficulty we have is when they thumb their nose at us and say, 'Well, we're not going to','' Mr Bradbury said.
''At that point we have an enforcement issue''.
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