Coalition urged to end GST loophole
The Bureau of Statistics figures - released as part of Australia's trade balance data for August - showed the total value of low-value threshold imports from overseas retailers totalled $7.61 billion, helping to push the trade deficit further into the red.
About 88 per cent to 95 per cent of the spending was estimated to be for consumer goods, the bureau added.
"It tells us that the consumer has been spending more than we thought, but all that spending has been leaking to the rest of the world," JP Morgan economist Ben Jarman said, describing the new figures as helping to fill a "black hole" in data collection on online shopping.
The new figures were larger than projected, Australian Retailers Association executive director Russell Zimmerman said.
"The concern isn't that people are spending money online - either locally or overseas. The concern is that it's not a level playing field," Mr Zimmerman said.
"We believe that online [shopping] generally will grow, and as that figure grows, there will be a bigger loss of income to the states and territories if they don't do something about the low-value threshold."
Australian retailers have struggled with subdued retail spending and consumer confidence in recent years, with some of the industry's leaders blaming tough trading conditions and online shopping for their weak results.
However, Barclays' chief economist Kieran Davies said while offshore online buying had grown by 15 per cent over the past year, such purchases made up only 3 per cent of domestic retail sales. Total retail sales are estimated to be about $260 billion.
"Adding this to domestic retail sales does not change the picture of sluggish spending on retail goods in recent years as it only lifts annual growth from 2 per cent to 2.3 per cent," Mr Davies said.
"Consequently, clamping down on foreign competition is unlikely to be the panacea imagined by domestic retailers."
Australians have been spending more on overseas internet purchases, citing lower prices, greater range of goods and services available, the strength of the Australian dollar and the speed of delivery as some of the central reasons.
Harvey Norman chief executive Gerry Harvey said the new calculations gave credence to his warnings several years ago that internet shopping was changing the retail environment, especially for fashion outlets and smaller businesses.
Frequently Asked Questions about this Article…
The $1,000 GST‑free threshold means low‑value imports below $1,000 have been exempt from GST. Retailers are urging its removal after Bureau of Statistics data showed Australians spent billions with overseas online stores, arguing the threshold creates an uneven playing field and leads to lost revenue for local businesses and state and territory governments.
The Bureau of Statistics estimated low‑value imports from overseas retailers totalled $7.61 billion in 2012–13, with about 88% to 95% of that spending estimated to be on consumer goods.
The large value of low‑value imports helped push the trade deficit further into the red, and JP Morgan economist Ben Jarman said the new figures help fill a 'black hole' in data collection on online shopping.
Barclays chief economist Kieran Davies argued that offshore online buying, while growing 15% year‑on‑year, made up only about 3% of domestic retail sales, so clamping down on foreign competition is unlikely to be the complete solution to sluggish retail spending.
The article cites lower prices, a greater range of goods and services, the strength of the Australian dollar, and faster delivery as key reasons Australians are increasingly purchasing from overseas online retailers.
Russell Zimmerman of the Australian Retailers Association warned that as online shopping grows, the low‑value threshold will lead to a larger loss of income for states and territories unless action is taken.
Harvey Norman CEO Gerry Harvey said the new calculations support his earlier warnings that internet shopping is changing the retail environment, especially affecting fashion retailers and smaller businesses.
Total domestic retail sales are estimated at about $260 billion, and Barclays noted that offshore online purchases only account for roughly 3% of that total, so their absolute impact on overall retail sales is relatively small.
Call 1300 880 160
Start a chat
Schedule a call
