GST On Low Value Imports Not the Main Cause of Retail Woes

04 January 2011

Claims the low value threshold on imported goods is responsible for the tough Christmas experienced by big Australian retailers is exaggerated, Assistant Treasurer Bill Shorten said today.

"Online retail sales account for about three per cent of all retail sales in Australia, and it is estimated that between 20 per cent to half of these sales relate to overseas purchases," Mr Shorten said.

"There is no denying that retailers are doing it tough, but other factors like the high Aussie dollar, the ongoing aftershocks of the GFC and the fact that Australians are simply spending less this Christmas are having a much greater impact than the absence of a 10% GST on a small number of overseas imports."

"Consumers enjoy shopping online because it offers them choice, convenience and often discounts far beyond 10%, because international retailers have embraced the digital economy and have developed sophisticated and consumer friendly business models."

Mr Shorten said the Government's crackdown on GST rorters, and the sensible approach we have taken by calling for a Productivity Commission inquiry into the future of Australian retail, is supported by the vast majority of retailers, including the Australian National Retailers Association and the Fair Imports Alliance, which includes:

  • Australian Booksellers Association – over 800 members

  • Australian Music Association – over 120 members

  • Australian Retailers Association – over 5000 retailers

  • Australian Sporting Goods Association – over 300 retailers and Australia's largest sporting goods wholesalers

  • Retail Cycle Traders Australia – over 150 retailers

  • Australian Fishing Trade Association – over 350 retailers and wholesalers

  • Australian Toy Association – over 300 retailers

  • Bicycle Industries Australia – 25 wholesalers, importers and manufacturers supporting the bicycle industry.

"We respect the fact that large retailers like Gerry Harvey and Myer have ongoing concerns, but the ANRA – their own industry body – supports the Government's approach. We will not be stampeded into making rash decisions because of a vocal minority, especially when the majority of the sector and consumer groups like Choice support our sensible, measured approach."

"The Productivity Commission will commence work in early 2011 and report back to Government within 9 months, and we have made it clear that sustainability and appropriateness of the current tax settings will be considered, so any suggestion otherwise by retailers is unfounded."

"By cracking down on non-compliance and having a rational review of the facts, challenges and opportunities faced by the retail sector in Australia, we will help our retail sector to grow in a way that is globally competitive on prices and provides consumers with the choice and sophisticated product offerings they deserve," Mr Shorten said.

4 January 2011