By Melinda Upton and Rebecca Kay (Sydney)
In recent months, the Australian federal Treasury has come under intense pressure from local retailers and state treasures to extend the Australian goods and services tax (GST) to overseas-purchased goods and services. On 27 November 2013, the Australian Federal Treasurer, Joe Hockey, met with state treasurers to discuss these controversial proposals for reform.
At present, goods and services purchased by Australian consumers from overseas are exempt from the 10 per cent GST, provided they are valued at less than $1000. National retailers argue that this gives foreign retailers a price advantage and encourages Australian consumers to shop extraterritorially. In an era where the profile of international retailers in Australia is spiraling as ever-increasing numbers flock to the region’s shopping malls and high streets, the threat looms large. Some national stores such as Myer believe the import loophole affects them so badly that they may even be forced to consider shipping products via New Zealand, so as to put themselves on a level-playing field with foreign competitors.