Retail lobby blasts Australia Post, ecommerce carriers
The domestic retail lobby in Australia has attacked Australia Post as playing a “key facilitative role” in the growth of foreign online retailers at the expense of the country’s domestic retailers. Other ecommerce carriers, credit card firm Visa and ecommerce marketplace eBay were also accused of harming the country’s retailers because of tax and duty exemptions on imported goods.
Submitting its view to the Australian Government’s Productivity Commission this month, the National Retail Association claimed Australia’s taxpayers were “subsidising” the transport cost of items sold into the country by foreign online retailers.
This was because the Post is restricted in the delivery charges it can impose by international agreements, the Association said, something Australia Post commented on in its submission to the Commission.
The Association, the largest lobby group for the retail industry in Australia, said foreign online retailers were also given an advantage by Australia Post because of its streamlined security procedures for “low risk” shipments, in which items do not need to be x-rayed.
The inquiry being undertaken by the government’s Productivity Commission is proposling to lower the threshold for goods and services to be subject to Australia’s 10% goods and services tax (GST).
The Commission’s draft report issued earlier this month suggested the tax exemption was only a “minor” factor in encouraging consumers to shop through online retailers overseas.
It suggested collecting taxes and duties on imported low-value items could prove more difficult than it was worth.
But the National Retail Association said Australia was losing out hundreds of millions of dollars with ecommerce imports being exempt from GST.
Australia Post should be required to report “extensively” on the nature and value of goods entering the country through the mailstream as “low risk” items, it said.
The NRA also said in its statement that Australia Post should explain to the Productivity Commission and retailers how its state-owned status fitted with “practices which will have the effect of facilitating the growth of foreign online retailers at the expense of Australian retailers with consequences for business viability and job opportunities in Australia.”
“Widespread business failure”
NRA executive director Gary Black said: “The cost of inaction on this issue will be widespread business failure, and around 80 thousand Australian jobs moving offshore. This would in turn result in substantially lower business and personal tax receipts, and falling GST collection.”
Australia Post handles around 36m low-value packages imported into the country each year, while express carriers including UPS, DHL, FedEx and TNT bring in a further 44m low-value goods into the country, with growth rates presently around 10% a year.
The NRA said the express carriers – represented by the Conference of Asia-Pacific Express Carriers (CAPEC) group – and Australia Post were failing to report accurately the value of goods being shipped into the country – costing Australia around $600m ($627m USD) in sales taxes a year, along with $150m a year in import duties.
The Association suggested that if lost customs fees were added in, Australia could be losing a total of $1bn ($1.04bn USD) a year from ecommerce imports.
