What was pitched as creating a “level playing field” for Aussie SMEs has been criticised as making goods “more expensive” and effectively introducing “a trade barrier”.
Several angry readers commented on the My Business story about the government removing the exemption of GST on goods valued at $1,000 or less that are purchased in Australia from foreign websites.
“Do you expect to pay Australian GST when you, say, buy a suit from a tailor while on an overseas holiday in Asia? Obviously not. But if you ring him from your Aussie house two weeks later and order a second suit you should pay Aussie GST? This measure says maybe,” one reader, identified only as Andrew, says.
“The idea that this somehow creates a level playing field is bizarre. It’s essentially a trade barrier that perverts the concept of a GST. To the extent that such barriers assist local retailers then sure, it does that [but] at the cost of freer trade and more choices for Aussie consumers.”
Andrew then suggests that such a move may be short-sighted by having the unintended effect of encouraging other nations to do the same to Australian businesses selling abroad.
“In future, such measures will be used against Aussie exporters to make our access to foreign markets more difficult.”
Another reader, Dwight Walker, implied that the move could force offshore companies to block Australian consumers from shopping on their sites.
“I use Amazon Web Services in USA and this will make it more expensive. Local Australian hosting is too dear or of a poor quality and non-competitive. Fix the non-competitive companies rather than tax companies who can cease trading with Australia if they want to by blocking Australian IP addresses,” said Dwight.
What are your thoughts – will the application of GST help Australian firms compete online with offshore competitors, or will it inevitably lead to higher cost pressures from the views outlined above or others? Tell us below!