Buyers baulk at online shopping tax

Convience: Patricia Tanks, pictured with her daughter Sofia and son Rocco, finds online shopping easier. Picture: Mark Calleja. Source: The Courier-Mail

ONLINE shoppers are angry they could be forced to pay tax on goods bought from overseas websites but retailers say it will help revive their struggling industry.

Under recommendations in the Federal Government's goods and services tax review, the suggested changes could result in Australian online shoppers being hit with GST costs when buying goods from international websites.

Online shopper Patricia Tanks, 43, said she regularly shopped online for "convenience".

"There are some things that you can't buy here and there's not as much variety as overseas," she said.

"I don't buy online because it's cheaper, I do it because it's convenient, I'm a mother of three children."

Shoppers don't pay GST on goods bought for less than $1000 on overseas internet purchases.

Shopper Estelle Oliveri said the introduction of GST on goods bought overseas wouldn't put her off buying from international websites.

"I wouldn't be happy about it," she said.

"If I desperately wanted it, I would buy it regardless."

A 2011 review found if the tax-free threshold on internet goods were lowered from $1000 to $100, it would cost about $500 million for the Federal Government to implement and has been deemed far too expensive to do.

But Australian Retailers Association executive director Russell Zimmerman said changes needed to be made.

"It needs to be a level playing field, retailers that are retailing online in Australia have to pay the GST as do bricks and mortar retailers," he said.

"Where those products are coming in from overseas, that's where it's hurting the Australian retailer."

Mr Zimmerman said GST charges on overseas goods would help improve the nation's unemployment levels and boost the economy.

"The industry employs something in the area of 1.2 million people, so from that perspective the consumers are supporting the jobs," he said.

"We are protecting some of those jobs for our kids and grandkids and ensuring the retail industry can survive."

New figures released by the Australian Bureau of Statistics yesterday showed retail spending rose 0.5 per cent in September.

CommSec economist Savanth Sebastian said if the tax threshold was lowered for overseas online sales, it would be a good result for the Australian economy.

"It makes the environment more competitive and fair across local retailers as well as the online retailers and that's a good outcome," he said. "Yes it means more money into the Government's coffers, but that money can certainly be used in other parts of the economy."

Treasurer Wayne Swan yesterday told radio the Government was not considering changing the GST because it would hit struggling Australians hard.

Retail magnate Gerry Harvey, who has been a strong advocate in introducing a tax on overseas goods, said he did not want to speak on the issue.

He said he was attacked after fighting for changes to be made in 2010.

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