A group of local business owners is lobbying the state government to support changes to the GST import threshold, making Western Australia a key front in national retail reform.
A group of local business owners is lobbying the state government to support changes to the GST import threshold, making Western Australia a key front in national retail reform.
In October last year, Premier Colin Barnett committed to opposing further changes to GST collection, which requires approval from every state, unless alterations were made to the distribution mechanism.
However, some WA business owners are urging him to reconsider, saying lowering the import threshold would give their businesses a level playing field with foreign competitors, while also raising revenue for the state government.
The Honda Shop managing director Eddie Peters said reducing the threshold would lower incentives for consumers to buy products from overseas.
“The business community in Australia is not asking for something special from the government,” he said.
The import threshold means that international online purchases below $1,000 remain untaxed, meaning only domestic producers pay the consumption tax below that mark.
“To change the GST, the federal government and all the states have to agree; if one state doesn’t agree it doesn’t happen,” Mr Peters told Business News.
“There’s only one state that has put a condition on it.
“What they’re (the state government) doing is actually holding the country to ransom.
“They’re also denying us (WA) that additional income.
He said the state government should support change to threshold first, with no conditions.
“If they did that, they would get the business support to get a bigger slice,” Mr Peters said.
“Every Western Australian will agree with you that we want a bigger slice of the cake.
“They haven’t got an argument (from retailers) about that, but it’s a different thing altogether.”
Nationally, calls are growing to expand the GST base to include imported goods valued at less than $1,000, with freshly minted Assistant Treasurer Josh Frydenberg recently saying the current arrangement hurt retail employment.
Mr Frydenberg said the threshold would be looked at in the upcoming tax reform white paper.
“Retail provides more jobs than any other sector in the economy, employing more than 10 per cent of the workforce, over 1.2 million people,” he said.
“Australian retailers effectively face a reverse tariff.”
A recent study by NAB found that WA had the highest per capita spending of all states on online shopping, with only the two territories at a higher rate.
In per capita terms, WA shoppers spent 15 per cent more online than the national average.
International sales make up about one quarter of online purchases Australia wide.
State Labor economic spokesman Ben Wyatt said the opposition would support the fixing of the distribution mechanism as the top priority.
“While the GST distribution is so flawed, Western Australians would be very reluctant to agree to be sending more of their taxation revenue to the other states,” he said.
