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Gerry Harvey Rebuffed By Federal Government

By Computer Daily News | Thursday | 28/11/2013

Harvey Norman Chairman Gerry Harvey who has been calling for an immediate 10% GST to be applied to online sales has been rebuffed by the Federal Government at least for the short time.

Yesterday's meeting of state and federal treasurers, called to discuss - among other things - possible lowering of the GST threshold on goods bought from overseas-based online retailers, broke up without a decision being reached - or apparently even being discussed in any great detail.

Any change is now unlikely before 2015 - if ever.

Federal Treasurer Joe Hockey said the states had been "provided with the material they had previously requested on the costs of any changes to the online threshold. They will now consider that advice." He added: "There was no agenda item to discuss any changes to the base or rate of the GST."

NSW Treasurer Mike Baird, who had been enthusiastically pushing for a cut in the threshold from $1000 to $30, said "various scenarios" had been presented to the state treasurers,

They showed that in the first year or two - and perhaps beyond - the cost of running the program would be "considerably" higher than the revenue it generates.

Though he didn't stress the point, that presumably means the states would score nothing from the new GST online regime in that period. But the feds would be out of pocket, as would the customers. No obvious winners there.

SA Premier Jay Weatherill said the treasurers generally agreed that the GST threshold should be lowered from the current $1000. "The whole meeting generally took the view there needs to be improved integrity measures, which includes the threshold, but we aren't yet at reaching an in-principle agreement about that," he said.

It's generally believed that the most likely way of collecting GST on low-value items, should the threshold be cut, would be to have Australia Post collect it on mailed items, and "express" services like DHL, FedEx, TNT and UPS do the collecting on items arriving as air cargo.

But all would have to be paid for their costs in providing such a service. In the UK, the Royal Post charges a handling fee equivalent to A$14.21; Canada charges the equivalent of A$8.82.

It's a safe bet Oz Post would be looking for at least $10, and perhaps much more, bringing the total to be paid on a $50 product - GST plus handling - to at least $15-20. Strong protests in electorates would be likely.

Next treasurers' meeting on the GST proposals is expected in March. Even if it agrees on a proposal to lower the threshold, given the need for Oz Post to put in new facilities - which presumably it would want a reluctant Government to fund - and hire and train new staff, it seems unlikely a new regime could be introduced before 2015. Happy Christmases, online buyers.

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