WA accused of blocking GST windfall
Australian retailers are accusing the Barnett Government of standing in the way of $1 billion in extra revenue by blocking reform of a tax loophole allowing GST-free online shopping.
The WA Chamber of Commerce and the National Retail Association say bricks and mortar retailers are being discriminated against by the exemption, a legacy of the GST's introduction in 2000.
Australia's $1000 threshold, below which GST is not imposed on imported goods, is among the highest in the world. It is $320 in New Zealand, $20 in Canada and $25 in Britain.
The push to cut the threshold has been led by NSW which argues it should be lowered "as soon as practicable" to protect the GST revenue base.
It is not just a "clicks versus bricks" argument because Australian online retailers have to charge and pay GST, putting them at a disadvantage to overseas sellers.
But WA, the only State or Territory resisting the change, argues that before the threshold is changed the entire GST distribution system must be revamped.
The NRA, one of Australia's biggest retail industry groups, said economic modelling by Ernst & Young had found the $1000 GST threshold was costing 33,400 jobs.
"If WA coalition MPs want to see more GST revenue flowing into WA coffers, they should tell their State colleagues to stop blocking reform of the tax loophole for overseas retail businesses," NRA chief executive Trevor Evans said.
"At the same time as the WA Government cries poor about the GST, it is also playing a political game to block reform that would bring it hundreds of millions in extra revenue over the life of its Budget."
WA Chamber of Commerce and Industry chief economist John Nicolaou said reducing the threshold would not be a panacea for local retailers' problems but it would help them turn a dollar.
"The case for lowering the GST threshold is an important tax reform to improve the competiveness of Australian retailers," he said. "Provided the costs of administration associated with a lower threshold don't exceed the additional GST collected, the WA Government shouldn't stand in the way of this reform."
All States and Territories have to agree to any change.
