GST on all mail order items

[Hiking Noob]

Id advise anyome to write to their MP. There is no reason to accept madness as inevitable. Even better if you are in a liberal electorate. They may ignore you. They may send a form letter in reply. From what im seeing online though this policy might just have been the nail in the coffin for this govt so make some noise while you still can.

So, Madness is trying to create a level playing field and supporting Aussie workers? 10% may be the difference between someone buying from OS or buying from a local retailer. Sure it is fun to blame the government for everything wrong with the country but while probably flawed this tax will be enough to increase local purchases which has to be a good thing.

Now, I do buy quite a bit online and my wage comes from promoting websites that offer all sorts of products and services at reduced prices but I still try to post local deals where possible. I do understand that many people can't find items locally and that is fine and an extra 10% shouldn't affect those sales too much. I hope that makes some sense, my brain is done for the day.

[GPSGuided]

But the problem with that argument is that, the added tax and potential increase in local purchases does not reduce the trade deficit. It's still the same foreign product but just with a grossly inflated price by our local distributor. In other words, the govt is helping the distributor make more profit, reduce the pressure for retail sector reforms and reduce citizen's purchasing power. Now, if the purchasing patterns are shifted to Australian made alternative, that'd be a different story.

[Hiking Noob]

From memory it was Johnny Howard that moved the threshold up to $1000, stating something like it will make local businesses more competitive, originally I believe the threshold was around ~$300 and didn't really do a huge amount to change pricing here, some people did go broke though.

That sort of makes sense but in Oz we sell such small volumes compared to places like the US or Ireland that the mark up on each item has to be greater, that's just the way it works. I have no problem spending more locally if the importer/sail network know their stuff but if they don't I'm going online and often buying from OS.

Why does everyone assume that if something is sold in Australia that the prices are "grossly inflated" I find a lot of the times our RRP isn't all that much higher than the US MSRP however the sale prices are often hugely different and them being able to dump last season's stuff on us for our current season doesn't help local retailers.

I know I'm fighting a losing battle and some local businesses probably should go broke but I still like the idea of the tax and support it(but not the current Gov) fully. My parents had a video shop when I was younger and you used to hear quite often that $6 was a lot to rent a new release video, most people had no idea that each copy used to cost us ~$120 to buy and they often didn't last all that long, people just seem to assume that they are getting ripped off no matter the situation.

[photohiker]

I don't see a GST on imported items as a big problem. It would even out the playing field. Many items I have purchased overseas are way more than 10% cheaper than local prices.

The problem I do see is the potential for added costs and delays for small item purchases. I can see a flat rate charge being applied to items of small value which basically makes them uneconomic and in some cases makes it difficult to buy something not available in Australia at all.

A better solution would be to drop the threshold from $1k to a few hundred dollars. Just let the small stuff float on through.

[vicrev]

I am a small time buyer/seller on Ebay......that's when it is going to get interesting..

[wayno]

what countries have zero thresholds on importing goods?
I wonder if its brought in there might be enough uproar to have i reversed to a more sensible figure. in the hundreds. it may be that commercial retailers have lobbied the govt and are influential at determining the govt policy on this. i dont know if its anything to do with whats happening with the TPPA . you have a massive amount of online shopping done on cheap asian sites.

[MrWalker]

Id advise anyome to write to their MP. There is no reason to accept madness as inevitable. Even better if you are in a liberal electorate. They may ignore you. They may send a form letter in reply. From what im seeing online though this policy might just have been the nail in the coffin for this govt so make some noise while you still can.

Changes to the GST are a States' decision. All States have agreed and the decision is not one the Federal Government can change. You would need to work on your State MP, but there is no obvious reason to reverse it, other than you want to buy from overseas instead of locally.

[ECMark]

Id advise anyome to write to their MP. There is no reason to accept madness as inevitable. Even better if you are in a liberal electorate. They may ignore you. They may send a form letter in reply. From what im seeing online though this policy might just have been the nail in the coffin for this govt so make some noise while you still can.

Changes to the GST are a States' decision. All States have agreed and the decision is not one the Federal Government can change. You would need to work on your State MP, but there is no obvious reason to reverse it, other than you want to buy from overseas instead of locally.

*other than you NEED to buy overseas.....

[walkerchris77]

Probably still cheaper to buy overseas even with the extra taxs.

[wayno]

yup, even when i got stung an extra 30% for duty and gst i was still saving another third on prices here,
the range in NZ is so limited i'd buy overseas anyway... overseas tourists are pretty shocked at our prices and limited range, we've got some of the highest prices in the world. we look at them and think they are rich with the gear they have because we cant afford to buy it here, although our wages are lower as well.
when i went to japan, i thought i'd died and gone to heaven in the mont bell shops. found an outlet store and the prices were way better than anything i'd find back home. not to mention when i discovered online shopping and saw some of he sales going on overseas. want arcertyx in NZ, then you're going to pay through the nose, the alpha SV jacket is $1000. i was looking at a north face outlet shop here and the rainshells were still at least $300 plus.... i'd keep going back and the stuff wasnt shifting and the prices werent shifting either...

[horsecat]

grossly inflated price by our local distributor. In other words, the govt is helping the distributor make more profit

I'm a local distributor (not hiking / camping gear etc), and I employ locals, use local freight companies and other local businesses, pay income taxes, company taxes, etc. And I can honestly say that I don't make massive profits, but I help the economy

[GPSGuided]

I'm a local distributor (not hiking / camping gear etc), and I employ locals, use local freight companies and other local businesses, pay income taxes, company taxes, etc. And I can honestly say that I don't make massive profits, but I help the economy

I should have been more specific on my earlier statement. Obviously there are differences across the industry and product range, and some are way over while others not so.

[ECMark]

grossly inflated price by our local distributor. In other words, the govt is helping the distributor make more profit

I'm a local distributor (not hiking / camping gear etc), and I employ locals, use local freight companies and other local businesses, pay income taxes, company taxes, etc. And I can honestly say that I don't make massive profits, but I help the economy

I can easily buy cycling gear for 50% of the price in store locally. Its all made in asia (Shimano etc), but its cheaper for me to buy it from the UK (CRC).

Whilst you may not be gouging, someone in the Australian distribution line is, which is why, even if the GST is applied, I will not change my spending habits. It will still be 40% cheaper.

[wayno]

SOME distributors seem to ruin it for local retailers, you talk to the retailers about their prices and they say that various brands cost them a lot of money to obtain in the first place

[GPSGuided]

Yes, cycling and outdoor gears have been the bad offenders. Photo gears used to be similar but has normalised significantly to the point of being competitive. What it says is that these overhead margin discrepancy issues potentially can be overcomed.

[Hiking Noob]

grossly inflated price by our local distributor. In other words, the govt is helping the distributor make more profit

I'm a local distributor (not hiking / camping gear etc), and I employ locals, use local freight companies and other local businesses, pay income taxes, company taxes, etc. And I can honestly say that I don't make massive profits, but I help the economy

I can easily buy cycling gear for 50% of the price in store locally. Its all made in asia (Shimano etc), but its cheaper for me to buy it from the UK (CRC).

Whilst you may not be gouging, someone in the Australian distribution line is, which is why, even if the GST is applied, I will not change my spending habits. It will still be 40% cheaper.

That is true and I am unsure what percentage Shimano Aus would make but a lot of the time parts are cheaper on CRC than a shop can get it at wholsale. CRC is in Ireland to allow them to undercut competitors and still make a profit, Gerry Harvey tried selling out of Ireland but it didn't really seem to take off for him. I have no idea how CRC can post items for free, postage to and from the UK is crazy but they will post seriously cheap bike frames for free!

[horsecat]

"Dumping" is the big issue a lot of the time when it comes to imported items undercutting local businesses.

I'm happy to pay a little extra for items if they are from a local retailer as the taxes paid by these stores (and distributors) go back into essential services that we all use here in Australia. Plus they employ Aussies (one local retailer supports many distributors and other suppliers / businesses). And, if it assists keeping them in business we then have shops to actually go into and try the items out, get personal service, faults looked after etc, plus the more business these stores get the more buying power they have. But sadly, some shops have had to increase their margin as the loss of business to the internet etc has affected their total sales and as a result have had to make more from their remaining slice of business. Then ranges, stock holding and employment decreases (and the service that should go with it) and soon enough they go out of business. Nobody really benefits if the local stores close.

[wayno]

if i go to a physical shop to check an item out, and i want to buy the item , i will buy the item from that shop if i buy it at all.
i take a risk buying some stuff online, i've bought brands online i've never tried before and arent sold where i live. but its still been worth the risk because the prices beat similar products sold locally and the gear has a combination of design features i can't find locally. some of those brands arent available in my country or the range is limited and they won't stock the item i want locally.
and i'm still buying quality brands overseas, its not a case of getting low quality gear that happens to be cheaper anyway.
in some ways the local shops arent missing out on my business. i'm just able to upgrade gear earlier than i otherwise would buying online. i can do my shopping by visiting one or more of the countries i'm buying from online... how many people here wait till they travel overseas before purchasing items they want to buy?

[GPSGuided]

"Dumping" is the big issue a lot of the time when it comes to imported items undercutting local businesses.

I'm happy to pay a little extra for items if they are from a local retailer as the taxes paid by these stores (and distributors) go back into essential services that we all use here in Australia...

Don't disagree. But there's a price for everything. When the best of our Aussie domestic price is 50-100% or more of what one can find overseas, it gets quite unreasonable. Given the govt (voted in by the populace) promoted globalisation and in a capitalistic free market economy, bankruptcy is but a natural process under such a system to allow businesses to reinvent themselves to flourish under the new environment. Of course, there'll be give and take.

[icefest]

https://theconversation.com/three-holes ... ases-46460

Australian Treasurer Joe Hockey last week announced the existing GST exemption for low-value imports would be removed, starting July 1, 2017. Non-resident companies will be expected to collect and remit the GST to the ATO. But will such a system work in practice?

Difficult to measure, harder to enforce

One of the reasons for abolishing the low-value threshold is to ensure overseas businesses are competing on a level playing field with their Australian counterparts. But this will only occur if the system for collecting GST on imports can be adequately enforced.

The Commonwealth proposal to require overseas suppliers to collect and remit GST on low-value imports raises numerous questions as to enforcement, with comments made by the Treasurer indicating a significant level of voluntary compliance by overseas suppliers will be required.

[GPSGuided]

Still a joke. Businesses and individuals are already struggling to meet the demands of their home country's tax law requirements, who's going to comply with Hockey's directive when he doesn't even have legal jurisdiction over them. Sending customer purchased good to Australia does not infer jurisdiction. The system will either be a farce or it'll penalise the buyers ie. High admin fee.

[Hiking Noob]

Slightly OT but my brother lives in Scotland and we no longer send presents from here as the import tax just ruins giving presents if the recipient has to pay tax for a present. Now we pretty much just use Amazon UK but not being able to view an item you are giving as a gift is pretty annoying.

[GPSGuided]

Slightly OT but my brother lives in Scotland and we no longer send presents from here as the import tax just ruins giving presents if the recipient has to pay tax for a present. Now we pretty much just use Amazon UK but not being able to view an item you are giving as a gift is pretty annoying.

An example of the contrary consequence of globalisation? International business transactions got closer while interpersonal relationships went more distant.

[Hiking Noob]

Good Lord, I was nodding off as I wrote that, I'm not sure I used the 'present' quite enough.

[South_Aussie_Hiker]

I don't have a problem with it whatsoever. It's ludicrous to think it has been allowed for so long.

I don't agree that we will still all just buy the same items from overseas through an Australian distributor.
1. That's actually still a good thing. Australian businesses turning over more money, paying more tax, and employing more people is a good thing - even if they are simply on-selling foreign items.
2. While on selling of foreign items will continue, it will make Australian manufacturers more competitive. Companies like One Planet will immediately be more competitive - allowing them to sell more, employ more, and perhaps spend a lot more on product development - so they can match the high tech or lightweight gear we've previously only been able to access OS.

Look at the story of Tarptent, or ULA, or Enlightened Equipment - all cottage manufacturers that have gone on to great things.

Perhaps this GST change will allow similar startups to become viable in Aus. In five years time we might all be buying lightweight quilts and tents of equal quality from an Australian manufacturer.

[icefest]

Let's be honest, the following chart has much more to say whether online shopping will be cheaper (or if local cottage makers will be able to be competitive/export).
Considering that over a period of 2 months the AUD can change by more than 10%, GST isn't going to make a gigantic difference.

[GPSGuided]

The high volatility of our AUD is also a significant factor for those who are in the import/export business, where the FX risk can easily kill the business if not managed appropriately. Few countries can handle these wild swings without self damage.

[photohiker]

'Dumping' is sending bulk product at below market price into a country.

That is not anything like selling stuff at normal overseas prices to people in a country who pay well above market price locally.

If you could buy Scarpas here for half the overseas price, you might be looking at dumping.

[photohiker]

The high volatility of our AUD is also a significant factor for those who are in the import/export business, where the FX risk can easily kill the business if not managed appropriately. Few countries can handle these wild swings without self damage.

Not really. It takes planning and careful management of your currency risks. The most simple solution is you negotiate your buy price and purchase the currency at the same time. That way, you protect your purchase from the worst of fluctuations. Anyone who just ordered in foreign currency and waited for the bill to turn up before protecting themselves from currency exchange movements wouldn't last in business very long. There are also other methods of protecting your business from the risk.

[GPSGuided]

Hedging only works to a point and needs to be managed carefully. Even then, businesses still go down, and up depending on the direction of Fx. That's just a given. Even if it protects from one trade, the next lot would come in at a very difference local price point, with direct impact on the business.