Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

Labor supports the Treasury Laws Amendment (GST Low Value Goods) Bill 2017 in principle, but we do emphasise the need to get the details right—in particular, the execution of this. Like many policies from this government, it appears they have messed up the execution and the procedures associated with the implementation of what is a very necessary and sensible reform.

Small and medium businesses are the backbone of the Australian economy. As such, it is important to ensure that Australian business is given a level playing field when competing against global players. Over recent years, the increase in online businesses has changed the landscape for many. This has allowed businesses to set up basically anywhere in the world and still be able to penetrate markets where they have no physical presence. This month we have seen a feverish discussion about the expectation around the arrival of Amazon into Australia after the company advertised for 100 jobs in Sydney and Melbourne. But it is also a reality that Amazon has been selling products into Australia for quite a while, and this is not unusual. Australians love technology and they love using new technology platforms, particularly to interact around social media but also to buy and sell goods on the internet. Australians have been quick on the uptake of online shopping, gaining the title of some of the world's most prolific cyber consumers. The annual World Internet Project found that the number of online purchases made by Australians between the years 2011 and 2013 grew by more than 46 per cent, whilst the monthly value of online purchases per person grew by nearly six per cent, to $218. During the 2012-13 financial year Australians spent more than $7 billion on shopping at overseas online shops. About 85 to 95 per cent of that was estimated to be for consumer goods.

This bill aims to level the playing field between those overseas sellers and local businesses when it comes to accounting for, and being liable for and paying, the goods and services tax. The amendments make supplies of goods valued at $1,000 or less at the time of the sale connected with Australia if the goods supplied are offshore low-value goods. This ensures that such supplies are subject to GST, consistent with equivalent supplies here in Australia. This model is the vendor registration model, and overseas suppliers—including electronic platforms like eBay, Amazon and the like, and redelivery services—with an Australian turnover of $75,000 or more in a 12-month period will be required to register to charge the GST. This measure follows the application of GST to the importation of digital services, passed in the Tax and Superannuation Laws Amendment (2016 Measures No. 1) Act last year, but also comes into effect from 1 July this year.

Australia's current $1,000 GST low-value exemption on imported goods is significantly higher than that in comparable countries such as the United Kingdom, where it is set at $25; Canada, at $20; Singapore, at $330; and New Zealand, at $320. However, previous Productivity Commission and Low Value Parcel Processing Taskforce reports note the difficulties in lowering the threshold. The commission found that, although the threshold was not the main factor affecting the international competitiveness of Australian retailers, there are strong in-principle grounds for it to be lowered significantly on the basis of tax neutrality.

Labor has been listening to some of the voices of industry and some of the stakeholders that have been involved in the bringing of this bill to the parliament and the consultations associated with that. It is fair to say that there are some concerns about the implementation of this system and the effects that it may have on small- to medium-sized businesses. Those concerns relate not to the principle of charging GST on goods to this value but to the method that the government has chosen to execute it and to ensuring that the liability is passed on to the government through the procedure that I outlined earlier.

Labor is of the view that, if we are going to do this properly, there should be some inquiry into the stakeholder voices and the concerns that some people have. So we are asking that the government consider due diligence to ensure that the measure is cost-effective and that it answer questions on enforcement and oversight, details that are currently quite vague. In particular, we are suggesting that an inquiry should look at the practicality of, and uncertainty about, the short time frame for implementation—it comes into effect in mere days, on 1 July 2017; whether any overflow from overseas suppliers not initially targeted by the legislation will be enforced at the border; whether all sellers, including Australia based sellers otherwise below the revenue threshold which may make them exempt from GST collections, are included in electronic platform provisions; oversight and compliance overseas, particularly for electronic platforms not paying GST; and ATO resourcing.

We are also asking the government to look at any enforcement issues that have arisen in preparation for the similar GST measure for the importation of digital services, which comes into effect on 1 July 2017. And we are asking the government about the alternative postal collection point model—this is something that has been suggested by many in the industry—and the reasons why it was not more thoroughly assessed and progressed by Treasury, particularly given the relative platform neutrality of a model like that. Some are of the view that the current model will be difficult to administer and that many overseas businesses that are not based in Australia but are selling goods into Australia will simply say, 'We're not going to pass on the GST; we're simply not going to do it.' It will be up to Australian government then to spend additional resources in seeking to enforce that GST collection with those businesses. Many of those organisations and many experts within the field have recommended that the alternative postal collection point model is something that should be considered as an alternative.

There is hardly a more important task than ensuring Australian businesses are treated fairly and with compassion to overseas interests, which, in turn, serves to ensure the security of Australian jobs. Once again, we are asking that the government consider some form of short inquiry to ensure that those issues are ironed out, that the integrity of the tax system is protected and, ultimately, that we maximise the revenue that should come from businesses who are liable to pay GST by ensuring not only that they are paying their fair share of tax and that that is delivered to government coffers but also that it is enforceable in the longer run. Once again, Labor offers its in-principle support for this bill, subject to the amendment that has been moved by the shadow Treasurer.

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