Stephen Jones (Whitlam, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Hansard source

It is a pleasure to follow the member for Lilley in this debate on the Treasury Laws Amendment (GST Low Value Goods) Bill 2017. He has dedicated a great deal of his time in this place to dealing with issues of inequality, particularly inequality within the tax system. This is a debate about amending our tax laws as they apply to low-value imports and low-value goods.

It is important to locate that in a context, and the context is: the Commonwealth government needs the revenue to ensure that we can provide the infrastructure and the services that the Australian people have made very, very clear they expect any Australian government to provide, whether it be Medicare, funding for education and our universities, or providing rail, road and bridge projects to ensure that we have the productive infrastructure fit for this century. The Australian people expect us to get on with this job, and we need the revenue to do it.

An important part of any responsible government's job is to ensure that we are removing the inequalities to ensure, as the member for Lilley has just pointed out, that everyone is paying their fair share, so that, whether you are a wage or a salary earner on a very modest income, or the captain of one of our largest national or multinational companies, you are paying the tax that you are required to under Australian law and thereby making a contribution to this great country of ours.

One of the areas that has been under review for many years now is the exemption for low-value imports that currently applies under our GST laws. The current low-value threshold is $1,000. So, if you are customer going to an online site or going directly to a supplier overseas and importing a good that is worth $1,000.50 then you are paying a GST impost on that good on import, but if you are purchasing a good worth $99.99 then you are not paying a GST impost on that good. There are many large and small retailers who are saying that this puts them at a competitive disadvantage—and there is some truth in this. What the bill before the House does is look at all of those importers with an Australian turnover of in excess of $750,000, makes them tax collectors for the Commonwealth and removes the exemption that currently exists on goods worth less than $1,000.

This provision has some history. Labor looked at it when we were in government. In fact we set up a task force under the Productivity Commission to have a look at it, and the Productivity Commission did indeed say that there was merit in us removing the uneven playing field that exists for retailers competing in Australia with imported goods of low value. The overwhelming majority of those low-value imports are not goods, as I described in my opening example, worth $999.99. They are less than $100. People are going online purchasing a CD, a DVD—I am told that people still purchase those things—an item of clothing or some small electronic goods for under $100 and importing them. There are many Australian retailers that complain that they are put at a competitive disadvantage because of that.

When the Productivity Commission looked at this in 2012, amongst its many findings it found two things: firstly, the driver for people to go to an online site and purchase a good, as opposed to going to a bricks and mortar establishment, was not just price; it might have been convenience; it might have been the capacity to browse across a range of different retailers to compare prices and do that from the comfort of their own lounge room, or once the kids had gone to bed at hours when the majority of bricks and mortar retailers simply are not open. So there are many factors, apart from price, that are driving consumers to go online, as opposed to going indoors, to purchase their low-value products—and, in fact, goods of any value.

The Productivity Commission made that important finding, and it said that this alone should not be a reason for us not to act. It did, however, say that the effort—the burden to the Commonwealth—at the taxing point should not be greater than the revenue that was going to be brought in as result of introducing these measures, and there was deep concern at that point in time that the compliance cost was going to far outweigh the cost of bringing that revenue in. That should be a concern to any responsible government. If, in implementing a measure such as this, it is costing taxpayers of Australia more than the reward they are getting in revenue, to enable the Australian government to provide for the goods and services that Australians expect, then we should think long and hard about doing this. One of the important reasons why Labor did not act upon receipt of the report in 2012 was that it was going to cost more than the revenue that we were going to gain.

That does not mean that the issue should not be under constant review. We welcome the fact that the government is looking at this issue and has announced an intention to legislate. But we have deep concerns, which have been outlined in the member for McMahon's second reading amendment, about the time lines and the engagement with stakeholders that the government has committed to as a result of this measure. That is why we have called for a review, and we ask all members of the House to support the amendments that the member for McMahon has moved in this place in this debate to ensure that we can have a thorough look at it. I have engaged with some of the online retailers who are concerned about the time lines. This has a few short weeks before it is supposed to be implemented. Most Australians would not know that, I dare say. Most Australians would not be aware that in a few short weeks time, on 1 July, this measure is set to be implemented.

There are some other issues that need to be looked at, which is why the review of the provision makes militant good sense. There is a concern that has been expressed by some of the stakeholders about the interaction between these new provisions, which are specifically put in place to allow vendors to be a taxing point for low-value goods—that is goods under $1,000—how that interacts with the existing arrangements for goods which are over $1,000. If you are direct importer and you have had any experience in this, as I have, you will know that you will get a phone call from Customs and they will tell you that your goods are here ready to be collected as soon as you pay the GST which is due to the Commonwealth on those goods. There are some who are asking what the interaction is between these two systems. Is it going to be cumbersome? Is it going to force retailers to push the prices up so that we only have one efficient system operating, as opposed to two? Or are retailers going to game the system to ensure that they are operating in one of the regimes as opposed to the other? These are all legitimate concerns that are worthy of being looked at.

I do not accept the threats that some of the large vendors have been making in the context of this debate. It is simply not good enough for a large multinational operator to say that if the government intends to impose a tax on their goods, just as applies to every other retailer in the country, they are going to shut up shop and not operate in this country. No government can allow itself to be bullied and threatened in such a way. That is not a reasonable way to engage with a government of any stripe and not a reasonable way for an operator to propose to respond to a reasonable proposition.

But we are deeply concerned with the time lines and some of the unintended consequences. That is why our second reading amendment calls for a review of these arrangements. None of this should be taken as a message to Australian businesses, and particularly small businesses, that they do not need to get into the online space.

As I said at the outset, there are many reasons why consumers are going to an online retailer as opposed to a bricks-and-mortar retailer which are not going to be changed by the mere imposition of a 10 per cent GST on that competitor. There are many reasons why people are going to an online version of a store as opposed to bricks and mortar version—convenience being one of them and shopping habits being one of them. So that is why Australian businesses, and particularly small businesses, have to have an online presence.

Recently, the member for Cunningham, Labor's shadow spokesperson for small business, Senator Katy Gallagher, and I opened a digital garage event in the Illawarra hosted by the Illawarra Business Chamber. I am very pleased to have Google providing training and information that goes to this very issue to small businesses in our electorates. A point made quite clearly by the providers of that information and training was that, if you are not online, you are not in the game and there is simply not an option for a business not to have a very strong online presence as part of their business strategy.

I also had the benefit this weekend of meeting with the Highlands entrepreneurs for regional development in Bowral in my electorate. They are setting up a new business incubator in the middle of a facility that was once a hardware store for close to a century on Bong Bong Street in Bowral. They are a group of innovators who are keen to ensure that start-up businesses have a facility and the networks necessary to operate in regional Australia. I am very excited about what they are proposing to do. They face some challenges. One of those challenges, as indeed every business in regional Australia is challenged by, is the unreliability of and, in many instances, the costs that they are paying for their broadband services.

The Highlands entrepreneurs for regional development are a group of entrepreneurs who are planning on a technology upgrade to ensure that their facility has broadband available to service the entrepreneurs and the start-ups that want to operate out of that business. The point I made to them quite clearly is that they should not have to do that. Under Labor's plan, this premises would have been connected by fibre to the premises. Under the absolute mess that the Prime Minister has made of the rollout of the National Broadband Network, they are connected by copper from the node, which is simply not going to be able to deliver the download and upload speeds that those businesses and those start-ups need if they are going to operate out of that incubator in Bowral.

That is just one example. There are hundreds and hundreds of other businesses who are suffering because of the absolute mess that this government and, in particular, this Prime Minister has made of the rollout of the National Broadband Network. A man who could not leave well alone and who thinks he is always the smartest man in the room, particularly when it comes to technology, has made an absolute cock-up when it comes to the rollout of the National Broadband Network. It is why, when I talk to businesses small and large and when I talk to households around my electorate and around regional Australia, they say: 'NBN doesn't stand for "National Broadband Network." It stands for "no bloody network."' They say that because they are suffering from service dropouts, unreliability, cancelled appointments and, in many instances, going for weeks and weeks with no phones and no internet services because of the mess that this government has made of the rollout of the National Broadband Network. So fixing the inequalities with GST is a part of the solution, but dealing with the cock-up that the government has made on the NBN is a big part of it as well.

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