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WHY IS IT BAD FOR AUSTRALIAN CONSUMERS?

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WHY IS IT BAD FOR AUSTRALIAN CONSUMERS?

A GST on all overseas goods means overseas sellers will simply raise their prices to cover the cost of the GST and extra administration, which means Australian consumers will pay more every single time they buy something.

AUSTRALIAN CONSUMERS WILL END UP WITH LESS CHOICE

Many overseas online vendors and marketplaces will put Australia in the too hard basket and stop selling here. Many of the goods we currently buy will simply no longer be available to purchase in this country. We’ll go back to being a land of limited shopping options and higher prices.

REGIONAL AUSTRALIA WILL PAY THE PRICE

If online marketplaces and overseas vendors pull out of Australia, this will particularly affect the millions of regional Australians who have far less shopping choice and access to begin with. They will end up paying even more with less choice and competition to keep prices down.

AUSTRALIANS COULD MISS OUT ON CONSUMER PROTECTIONS

Trusted online marketplaces offer Australian buyers certain consumer guarantees and protections. If the Government forces these marketplaces to start charging GST, many Australians will give them a miss and start shopping directly with overseas vendors. That means less GST for Australia, and less protection from shonky sellers.

REDUCED COMPETITION AFFECTS AUSTRALIAN CONSUMERS

Competition is one of the best ways to keep the marketplace fair and affordable for consumers. Because many overseas vendors will stop selling to Australia once the GST is added, Australia will go back to being an island where global sellers put our country in the too hard basket. This means less or no shipping to Australia. Restricted choice, competition and higher prices. It’s bad for Aussie consumers.

WHY IS IT BAD FOR AUSTRALIAN SMALL BUSINESS?

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MORE THAN 35,000 AUSTRALIAN BUSINESSES WILL BE AFFECTED

There are more than 35,000 small Australia businesses, employing more than 60,000 people, who currently use sites to sell their goods overseas. If Australia puts a GST on all goods coming here, it is very likely other countries will reciprocate and tax Australian businesses selling into their countries. Australian businesses already struggle to keep prices low enough to compete against goods from countries with low wage economies. Even a small price hike will see them become uncompetitive and their export market will dry up.

THIS WILL HARM OUR EXPORT MARKET

Technology enabled commerce has meant Australian businesses of all sizes can gain access to world markets. This has seen the emergence of around 35,000 micro-multinational Australian businesses – small businesses that sell to the world. But if Australia puts a GST on all products coming into Australia, it is likely the countries our businesses export into will do the same. Australian small businesses are already at a disadvantage because of our geographical distance from other markets and our high wage economy, both of which affect the price of goods. Even a small price hike will see much of our export industry dry up.

WHY THIS IS BAD FOR AUSTRALIA?

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IN A GLOBAL ECONOMY, THIS IS A BACKWARD STEP

Australia has always been at a geographical disadvantage when it comes to trade, but the advent of the Internet changed that. Small Australian businesses can now trade easily and economically with the rest of the world. But global ecommerce only works effectively when it is ‘frictionless’ which is why no other country has restricted their ecommerce economy by putting a GST on all imports, including low cost ones. In an increasingly global economy, this is a dangerous precedent by the Australian Government and a backward step in a time when we should be embracing the technological opportunities for Australian businesses, not putting red tape on them.

IT WON’T RAISE ANY SIGNIFICANT REVENUE

In 2015 the Federal Government asked the Productivity Commission to look into applying GST on all overseas purchases. They looked at a threshold of $500 and collecting the GST at the border through Australia Post and Customs. That proved too expensive and the Productivity Commission reported that most transactions had an average price of less than $100. So the Government floated a $20 threshold, but the Productivity Commission found that the current tax and duties collection process was “not efficient” and that the cost to collect the revenue would be $2 billion – far outweighing the $550 million it would bring in.

ASKING MARKETPLACES TO COLLECT TAX FOR THE GOVERNMENT MEANS A BIG DROP IN AFFORDABLE IMPORTS

Currently the Government collects GST only on overseas purchases worth over $1000. It collects this via its Customs and Australia Post agencies. The Government looked at reducing this amount down to $500 but their own Productivity Commission found it would cost far more to collect the tax than the revenue it would raise. So now they have asked third party sites to collect the tax for them, even though these are marketplaces not sellers.

Take Action

We will collate all the messages and send them as part of our Keep Shopping Open submission to the Productivity Commission inquiry.