Australians buying goods overseas via the internet would pay far more for their parcels under a proposal put to the Federal Government to quell anger from domestic retailers.
The final report of a committee looking at reducing the threshold at which GST is imposed on imported goods has backed a system that would result in Australia Post and other parcel deliverers becoming tax collectors. It comes after an outcry from traditional retailers that their bottom lines were being hit by cheap imports.
Goods with a value of less than $1000 are exempt from GST.
The number of overseas parcels more than doubled between 2006-07 and 2010-11 to 48 million. The number of low-value imported parcels jumped 58 per cent between 2008-09 and 2010-11.
The report of the task force, which reported to the Government in July, was released yesterday and argues there would be higher costs for Australian consumers by abandoning the $1000 threshold.
There was scope to lower the threshold but the task force said parcel deliverers would need to collect the GST from customers.
There would be more paperwork for both deliverers and customers to determine the real value of goods in parcels. Gifts from overseas would not be exempt from the GST.
At a threshold of $500, the cost of collection could reach $20 an item.
Assistant Treasurer David Bradbury said the Government would continue talks with the retail sector before outlining its response to the report.
National Retail Association director Gary Black said that up to 33,000 jobs were at risk if the Federal Government failed to act on cheap online imports.
"The Government must scrap the discriminatory low-value threshold, which is reducing the ability of Australian companies to compete against foreign-based online retail giants and undermining the future of a strong local industry," he said.
"Australians can no longer stomach foreign-based online retail giants growing at the expense of local small to medium-sized businesses that so many Australians rely on."