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Can Anyone Defend Imposing The GST On Overseas Online Sales?

It’s a line of argument that Gerry Harvey completely denuded of credibility: allegedly the main reason shoppers buy online is that the lack of GST on online purchases under $1000 makes them cheaper than local competitors. It takes about five seconds of work to demonstrate that that position is total rubbish, since the savings from overseas shopping on many products are way higher than the 10 per cent GST rate. So will anyone stand up to support it?

Picture by Chris Hyde/Getty Images

One woman who will is Margy Osmond, CEO of the Australia National Retailers Association (ANRA). To be clear, that’s her job; the official ANRA position is that any purchase over $100 should attract GST. But at a lunch hosted by marketing company Salmat, Osmond was staunchly ready to defend that approach when I asked her about it. Her stance: “We think the threshold should be lowered for any number of reasons.”

That said, she doesn’t pretend that GST is the whole story. “GST alone is part of the puzzle.” Other issues the ANRA is concerned about are the cost of salaries in Australia, bans on parallel imports and the relative inefficiency of the local supply chain. Collectively, those might account for the apparent price differences, but it’s far less evident how the issue might be resolved.

For instance, one ANRA argument is that Australians should be willing to pay GST, since if we don’t then there’s less money feeding into the taxation system. By ANRA’s estimates, overseas sales account for at least $630 million in lost GST each year. Osmond argues that number is on the low side, since it doesn’t include fraud in the form of parcels shipped in with a falsely low declared price.

But whatever the numbers, that assumes a level of community interest which, to be frank, Australians appear to shy away from in droves. If we were genuinely concerned about the current welfare of our society, we wouldn’t freak out about the carbon tax or about paying more tax to support the education and health systems. Poll data suggests that’s far from a universally held view. Indeed, we seem entirely capable of railing against people getting paid lower wages or getting sacked while simultaneously complaining about the price of absolutely everything we buy.

In short, we’re contradictory, but we don’t want to be told that. We want cheap goods while everyone gets a decent wage. It’s not going to happen, but we’re not going to stop complaining while it doesn’t happen.

Originally published on Lifehacker


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