Right: online shopping is becoming popular across all age groups as even older shoppers become "computer-savvy". Many involved in the retail industry see the shift to internet as inevitable. Found a word you're not familiar with? Double-click that word to bring up a dictionary reference to it. The dictionary page includes an audio sound file with which to actually hear the word said. |
Further implications
Despite the recommendations of the Low Value Parcel Processing Taskforce it seems unlikely that the GST will be imposed on low value online imported goods in the immediate future. Mechanisms for cost-effectively imposing the tax have still to be refined. There will also be a significant political cost for any government imposing a tax that will increase costs for the rapidly growing number of computer savvy consumers. It has been suggested that in as volatile an electoral environment as that which exists in the lead-up to the next federal election, neither the Gillard government nor the Abbott opposition is likely to want to be seen to have opened up an additional area to which the GST can be applied.
Ultimately collection mechanisms will be refined and federal governments will make political trade-offs to make an extension of the GST into currently untaxed areas more palatable to consumers. This will have to be done as the online importation of goods is likely to increase and governments are not going to be willing to forego a growing source of tax revenue.
Those state governments that have come out and spoken in favour of putting the GST on imported goods of a value less than $1000 have stressed the benefits that they would offer voters via the extra revenue they would receive.
The New South Wales Treasurer, Mike Baird, has claimed that his government would remove the stamp duty on buying a home. He has said that the GST-free threshold on goods bought online from overseas retailers could be lowered from its current $1,000 dollar limit to $30. This would net the Federal Government millions, and Mr Baird would like to see that revenue used to help the states abolish stamp duty on housing.
Long-term it would also seem that Australian bricks and mortar retailers are going to have to join that sector they currently see as the opposition. The future of Australian retailing requires that all sectors make greater use of the consumer's readiness to shop online. Physical retailers are also going to have to improve the quality of the in-store service they offer consumers in order to justify their continued existence. Finally, a serious investigation needs to be conducted into why overseas suppliers of some key imported goods make them available to Australian retailers at highly inflated prices.