June 24, 2013
Mr CHESTER (Gippsland) (21:50): I appreciate the opportunity to rise tonight to raise an ongoing concern in my electorate of Gippsland relating to employment opportunities for young people particularly in the retail sector. I have spoken in the House many times previously about the importance of sustainable long-term jobs in regional Australia. The issue I want to discuss is the collection of GST revenue from goods purchased online from overseas that are valued at less than $1,000. I know that it is a topic of some public discussion at the moment. It is something that I have raised over the last couple of years with the Treasurer and within the joint party room on the coalition side.
Basically the situation is unfair. An unfair playing field has been created for Australian retailers who are already finding it hard to compete with their higher cost structures than their competitors overseas. In my electorate I have always championed the message of putting locals first by campaigning and encouraging people to shop locally and support local traders, because these are the people in my community who support their community growth. They support our sporting organisations, our local surf lifesaving club and other organisations by donating their time and helping our region to prosper.
Mr Lyons interjecting—
Mr CHESTER: I will take the member for Bass’ interjection. Our surf lifesaving club is a wonderful club and it is well supported by the local business community.
The government also benefits, though, when retailers in our local community are doing well, because they share in the revenue and that helps pay for practical things in our community like schools and hospitals, doctors, nurses and roads. I accept that no-one likes paying taxes but everyone likes the public benefits they bring to our communities.
The current approach to online purchases of imported goods is nothing short of tax avoidance on a grand scale through the ignorance of governments over many years. Setting the tax-free threshold at $1,000 means that the government misses out on revenue from millions of foreign purchases every year. These are goods that would attract the GST if they were purchased in Australia but they are shipped into our country with no benefits at all to the broader community. On top of that, there are repeated allegations of fraud and rorting of the current system and, not satisfied with the $1,000 tax-free threshold, the importers are prepared to provide invoices and break up an item such as a camera into three or four different pieces so that it actually stays below that point—in fact, while the entire camera may be worth $2½ thousand or $3,000. If you send it to Australia as a flash unit, as a zoom lens or as a camera body, you avoid paying the GST.
Some people would say, ‘What does it matter?’ It matters when we have state and federal governments desperate for revenue to fund really important infrastructure programs right throughout Australia and major initiatives and reforms which have bipartisan support like the National Disability Insurance Scheme.
I have read all the arguments for and against lowering the threshold and I note the claims by those who argue for the status quo, that the cost of recovering the tax is too high. I have read those arguments but I find them both false and misleading in their commentary. There was the Low Value Parcel Processing Task Force, which found there was an in-principle case to reduce the tax-free threshold. That low value task force recommended major changes—although I acknowledge it did not actually identify the new figure for the GST-free threshold. The National Party, at its recent national conference, passed a motion setting that figure at $20, and I think that has the support of the National Retail Association and others. In its submission to the 2013-14 budget process, the NRA stressed the major implications of the current system, the implications it has on our employment throughout Australia and the future prosperity of the retail industry in this nation.
I acknowledge this tax-free threshold issue is not the panacea for all the problems facing the retail sector, but it is an issue of significant concern as making already difficult trading conditions for our retailers perilous for them and many others. According to the National Retail Association, which commissioned an Ernst & Young report on this issue, up to 34,000 local retail jobs will be lost if our local businesses continue to face the type of tax discrimination which exists today. It makes sense for the Commonwealth and, through them, the states to maximise the GST revenue, and I think they are finally recognising the missed opportunity that exists today.
This is not a question of being for or against online trading—I acknowledge, as everyone in this place does, it is a fact of life in the 21st century—but it is a fundamental question of fairness. On the one side of this debate, we have our own retailers, Australian companies—whether they be major retailers or mum-and-dad small businesses in our own local communities—using their own money, being entrepreneurial, having the innovation, the determination to go out and start their own businesses and employ Australian workers. They are being exposed to global forces and global competition and they can deal with that. But, at the same time, they are at a distinct competitive disadvantage, because governments have failed to act on this area of discrimination.
It is easy to point back to previous governments and say, ‘The Howard government didn’t do enough in this area,’ but times have changed and this government has not responded, I do not believe, in an efficient enough manner to help protect the future viability of Australian small businesses. It is time to take action before more staff are laid off and it is time to take action to mend our GST laws.