Couriers kill case for lower GST-free threshold on imports

Any hopes of a reduction in the $1000 GST-free exemption on private imports of photographic equipment have been dashed by the Federal Government, which has ruled that any change to the current regulations would not be “administratively feasible .“

PMA director Peter Rose said the industry was “appalled” at the decision, seemingly influenced by a submission from a body representing large international courier companies, and has organised a “petition of protest” to pursue the matter. 

“At least we succeeded in getting the whole issue thoroughly examined. We certainly don’t like the answer but we do now at last have a response. But this is not the end of it,” he said.

PICA executive director Paul Curtis said, “For the government to say it is not administratively feasible is akin to the police saying we will only collect speeding fines when people are doing 120kmh. If something is downright wrong it just has to be fixed. Other countries are managing tax collection on parcels, so how come Australia can’t do it?”

In its final report, the board of tax review recommended to the Government: “In relation to the importation of services by consumers, the board’s view is that, based on the difficulty associated with seeking non-resident compliance with Australia’s GST and the extensiveness of online retail activity, it does not seem administratively feasible to try to bring non-resident supplies of services into the GST system at this time.”

Last week, the Government accepted this recommendation.

The industry case was based on the fact that if a retailer in Australia supplies goods to a customer in Australia by package delivery from within Australia, it is the retailer’s duty to collect the GST. This restriction is not placed on retailers delivering to Australian consumer when they are shipped from overseas.  

This, the photo industry argued, was putting Australian retailers at a commercial disadvantage. Over the last 18 months, representations made by PMA and PICA had been joined by a consortium of other  trade groups including the sporting, cycling, fishing, books and toy associations.“

Aggravating the problem is the enormous increase in on-line retailing,” Curtis said.

 “Furthermore, a recent Nielsen survey indicates 43% of Australia’s online spending in 2009 went to international e-tailers. This is up from 14% in 2004.”

Curtis said that the Customs Agency Services supported the industry view by submitting that: “By reducing the threshold back [to $250] the Australian consumer will be looking at buying from the Australian business and less likely to import direct from overseas which creates more business and jobs for the local industry.”

Courier lobby group's submission hits home

However, he said a submission by the Conference of Asia Pacific Express Carriers (which represents the interests of DHL, TNT, UPS and FedEx stated that: “The current low value threshold is set at an appropriate level that ensures postal and non-postal items are treated the same and strikes an appropriate right balance between revenue collection and administrative efficiency.”

In its submission presented last September, CAPEC said a reduction in the low value importation threshold will “substantially increase” the cost of low value imports due to GST and customs duty (if applicable) and fees and charges imposed by the Federal customs agency (which it claimed in many instances would be greater than the GST and customs duty collected).

CAPEC also claimed transport costs would increase as carriers would have to warehouse and manage the goods until the relevant taxes, duty and customs fees were paid by the consignee.

Curtis said  the Minister for Small Business, Craig Emerson, showed how “hopelessly out of contact the Government has become” when in response to a question last month from Peter Rose about the collection of GST, he remarked  that “the Australian public had shown their preferences by heavily supporting the deregulation of markets, in particular, marketing of books.”

Curtis said the Minister also felt the added competition in the market place added to increases in overall productivity.

“With that lack of grasp, perhaps the Minister should amend his title to the Minister for Small Business Overseas!”

Curtis said. “Governments need to cut the fairy floss and get to grips with the items of substance that are affecting the economic viability of our nation.”

Malcolm Kennedy of CR Kennedy suggested that the industry is “now at the stage when industries need to lobby the state treasurers as it is these governments that are missing out on the foregone GST revenues.”

Protest petition at PMA show

Rose said with so many jobs at stake, the photo industry has drawn up a “petition of protest” which can be signed at next month’s PMA Digital Life Expo by all those who work in the photo industry. The petition can be signed either at the PMA convention or at the PMA booth on the exhibition floor.