Tax threshold 'won't change web shoppers'
Just 18 per cent of 1250 respondents to a study conducted on behalf of MasterCard said they "would be more inclined" to shop at local sites if the GST threshold was lowered from its current level of $1000.
Among the online shoppers surveyed, 38 per cent said a change to the threshold would have no effect on their behaviour while 24 per cent said any move "would only cause them to buy less often".
MasterCard executive David Masters said the results indicated that changes to the GST threshhold were "not enough to substantially change the shopping behaviour of Australians".
This is despite the fact that - all things being equal - most survey respondents expressed little preference between overseas and local online sites for a wide range of popular goods. For make-up and clothing accessories, only 9 per cent of respondents had a preference for overseas online retailers. Around 57 per cent said they were not concerned whether the vendor was local or overseas.
The most significant bias was for book-buying, with 16 per cent of respondents expressing a preference for overseas vendors.
The big swing factor was, of course, price, with 86 per cent saying they preferred to buy from overseas sites due to the fact it was significantly cheaper. A better range of goods was another reason given by 62 per cent of respondents when asked why they preferred overseas sites, but they were also preferred for ease of navigation and for offering better information about a product or service.
The survey did not take into account extra charges that would apply to popular online purchases such as clothing and cosmetics.
According to research from Macquarie, applying both GST and duties to clothing would raise online prices by 21 per cent. The cost of cosmetics purchases online would rise 15.5 per cent, which "eliminates much of the existing price discrimination that exists", Macquarie said.
Frequently Asked Questions about this Article…
MasterCard research of 1,250 respondents found lowering the GST tax-free threshold (discussed from the current $1,000 level) would do little to change Australians' online shopping behaviour. MasterCard executive David Masters said the results indicate changes to the threshold are "not enough to substantially change the shopping behaviour of Australians."
Only 18% of the 1,250 respondents said they "would be more inclined" to shop at local sites if the GST threshold was lowered from $1,000. By comparison, 38% said a change would have no effect on their behaviour and 24% said it would only cause them to buy less often.
For many popular goods respondents showed little strong preference. For make-up and clothing accessories only 9% preferred overseas retailers, about 57% said they weren’t concerned whether the vendor was local or overseas, and the biggest overseas bias was for books, where 16% expressed a preference for overseas vendors.
Price was the biggest driver—86% said they preferred overseas sites because items were significantly cheaper. A better range of goods was cited by 62% of respondents, and overseas sites were also preferred for easier navigation and for offering better product information.
No. The survey did not take into account extra charges that would apply to popular online purchases such as clothing and cosmetics.
Research from Macquarie cited in the article found that applying both GST and duties to clothing would raise online prices by about 21%, while cosmetics purchases online would rise by about 15.5%—a change Macquarie said "eliminates much of the existing price discrimination that exists."
The article refers to the current GST tax-free threshold for imported goods as $1,000, which was the level used when asking respondents how a change would affect their shopping habits.
According to the MasterCard study, no — lowering the threshold alone is unlikely to substantially change shopping behaviour. Only a small portion of respondents said it would make them more inclined to shop locally, while many said it would have no effect or would simply reduce how often they buy.
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