The federal Opposition has weighed into the debate on applying GST to online overseas purchase under $1000 calling on Australian retailers to become more competitive.
In a doorstop interview, shadow treasurer, Joe Hockey, said the Opposition stood by its decision in government to lift the duty-free threshold to $1000 arguing that the $1000 limit was then required to stop “rorting”
“Understand this: there was significant rorting of the duty-free program at airports when there was a previous lower limit,” Hockey said. “We, in Government, increased it to $1000 which means that Australians can bring in up to $1000 of goods without paying GST. That system’s worked well.”
Hockey attempted to pour water on retailer’s current advertising campaign to lower the $1000 threshold arguing that a large slice of the retail market — such as refrigerators and other electrical appliances — were not affected by competition from overseas online stores.
“I think when it does come to clothing there is a significant threat to the industry from internet sales but we’ve all got to become more competitive,” he said. “We can’t close our eyes and think the internet’s going to go away and we just need to adapt and find new ways of being competitive.”
According to Hockey, Retailer’s claims that they were losing serious business to overseas online retailers were exaggerated.
“Half of retail sales over the internet go to Australian companies and Australian based retailers,” he said. “It’s only around three per cent of all retail sales that are going offshore.”
Hockey’s comments echo those of consumer advocacy group Choice, which has described retailers' campaign as an "alarmist red herring" driven by self-interest.
"This is not about GST," spokesman Christopher Zinn said, noting that a camera sold online by Myer for $557 could be bought from Hong Kong through a company with Australian-based staff for $346.
"Major stores are not being forced to charge these high prices.
"This debate is about quality of service, competitive pricing and the inability of some retailers to understand the future of internet shopping."
Greens' leader, Bob Brown, has come out in support of the retailers’ campaign.
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