Back of an envelope calculations no way to create a level playing field
CHOICE says new proposals to lower the GST threshold would risk penalising Australian consumers for the actions of overseas businesses over which they have no control.
The final report of the GST Distribution Review recommends lowering the current $1,000 threshold for paying GST on imports initially to $500 and then to a level as low as $20.
But the consumer group says lowering the threshold must produce net benefits for the Australian community, and not increase hassles and costs or impose penalties on consumers, for no gain.
“The problem of collecting GST from overseas businesses is that they have no obligation to pay it,” says CHOICE head of campaigns, Matt Levey.
“This report proposes punishing Australian consumers for the actions of overseas companies who don’t pay the GST by confiscating goods before a household receives them.1
“CHOICE fully supports a level playing field for Australian retailers, and we accept that if there is evidence the threshold can be reduced cost-effectively and efficiently, it should be done.
“But there is currently no business case, no cost-benefit analysis, that shows you could immediately lower the threshold and raise more from the tax than you would spend on collecting it.
“CHOICE is calling on the Federal Government to avoid a knee-jerk response, and only lower the threshold if it is established that we can actually raise revenue, and benefit the Australian community, from such a change,” says Mr Levey.
Matt Levey, CHOICE head of campaigns – 0488 214 066
1. See ‘GST Distribution Review – Final Report’, footnote 15, page 160.