Plans for additional GST to international transactions have sparked a rife debate.
Currently any overseas purchases made under $1000 are tax-free, but this low value threshold could be reduced to $20 or even zero.
While it’s bad news for online shoppers, small businesses around Australia have opened arms to the suggestion made by Federal Treasurer Joe Hockey last week.
The executive director of the Council of Small Business of Australia, Peter Strong, is in favour of the proposal, explaining the “need to have a level playing field”.
With the dollar plummeting against other currencies, online overseas purchases could soon become a thing of the past, pushing support for local businesses.
“There’s some people who like to support local businesses,” Strong said. “The closer the prices are together the more likely they are to support those business.”
An opportunity to improve Australia’s retail
RMIT animation student Amber Tanner said she will “boycott” the online book industry and go local. Before the dollar fell, she said, “I was ordering everything online because it was cheaper, but it’s just not anymore.”
Strong said it’s hoped the shift in consumer habits will also cause a change within businesses themselves.
“We want the suppliers and wholesalers to become more efficient,” he said. Also, he added, the suggested increase “sends a really good message to the small business community that the governments have listened”.
Naysayers to the proposed threshold change include Alexandra Schischov, founder of local online shopping directory Stylizen. He said, “It’s not going to have the desired result.”
Schischov said he believes government and small businesses might be creating a “solution without looking at the cause”.
The online world of retail didn’t gain popularity for anything. Shoppers are seeking variety, convenience and the best price. Some international retailers are shipping products faster than Australian retailers.
Schischov suggested Australian retailers should look at why people are shopping internationally. “It’s an opportunity to improve their service by either faster shipping, free shipping or improving variety.”
“At the end of the day I’m willing to pay a small price premium for the convenience of having it now.”
Last year, Mecca Cosmetica dropped their prices by 20 per cent to bring their customers global brands that match international prices. “That’s been quite a successful strategy for them,” Schischov said.
Mr Hockey and state treasurers will meet next month to decide the new threshold.
Image: William Hook, Flickr.
