Another blow for GST campaigners
Sydney Morning Herald
Friday April 1, 2011
THE Productivity Commission has questioned the foundation of a retailers' campaign against the GST exemption for consumers who buy from overseas using the internet.In a wide-ranging issues paper released yesterday, the commission said that even a "large reduction" in the GST-free threshold of $1000 might not make a "significant impact" on the number of parcels affected.This was because preliminary data from Customs showed the average value of parcels claiming the GST exemption was "less than $100", the commission said.In another blow to the campaign led by the billionaire Solomon Lew, the commission said some shops were more expensive than overseas sellers, even after the GST difference was taken into account.The commissioners Philip Weickhardt and Louise Sylvan will also examine the role in the retail industry of private equity, which has been behind two retail collapses so far this year, including the failure of the fashion chain Colorado this week.Other issues in the spotlight include the growth of big-box retailers, such as Officeworks, Costco and Bunnings, and the industry's labour problems.But the focus of the inquiry is firmly on the challenges posed by the internet and overseas shopping, issues complained about loudly in full-page newspaper ads taken out by Mr Lew and others, including the chairman of Harvey Norman, Gerry Harvey, and the chief executive of Myer, Bernie Brookes, in January.Treasury estimated the GST-free threshold would cost the federal government $460 million this financial year, rising to $610 million by 2014, the commission said yesterday.But it said that some consumers bought from offshore "because they simply cannot purchase an equivalent product from a local supplier".It asked for submissions on the question of whether Australia's GST-free threshold was appropriate.At $1000, Australia's threshold is far higher than the $20 limit in Canada, the $44 limit in New Zealand or the $314 limit in Singapore.While it will examine whether Australia's shopping centres use their power to charge high rents, the commission has shied away from a "detailed examination" of the effect of competition between Coles and Woolworths.It has confined itself to asking whether there are any competition issues not being addressed by other inquiries.Submissions are due by May 20.
© 2011 Sydney Morning Herald
