Case study 3
Date: 27/11/2013 | Case Studies
The decision to lower the GST-threshold on imported goods worth less than $1000 has been pushed back until March next year.
That means Christmas presents bought online this year from overseas will not be subject to the tax.
I don’t expect to win a popularity contest on the back of this, [but] it is fair for our local retailers.Mike Baird, NSW Treasurer
State treasurers met Federal Treasurer Joe Hockey in Canberra on Wednesday to discuss lowering the threshold.
In recent weeks, Australian retailers and state premiers have increased calls for the threshold to be lowered significantly below the current $1000 threshold or abandoned altogether, saying it gives foreign retailers an unfair advantage over local retailers.
Mike Baird, NSW Treasurer, said on Wednesday that there was no final decision on how much the GST-threshold ought to be lowered.
He also said there were "various scenarios" presented to the treasurers showing that in the first "year or two" the cost of running the program would be higher than the revenue it generates.
However, those costs will apparently fall with each year that the program continues.
"The business case ... is very close to being finalised," Mr Baird said. "It is clear that there was a lot of consensus across the room that we need to do this."
However, Mr Baird admitted his support for the policy would not be popular.
“I don’t expect to win a popularity contest on the back of this, [but] it is fair for our local retailers," he said. "The tax system needs to be brought into the modern age and we’re prepared to argue for it.
The National Retail Association wants shoppers to be charged GST on overseas purchases worth more than $20.
Chief executive Trevor Evans said earlier this week that the current GST-free threshold of $1000 a parcel was introduced before online shopping became widespread.
“The plain fact is that GST was always supposed to apply to the types of consumer products that people are now regularly purchasing online,” he said.