Money Online shoppers to be stung by GST from next year, tax on tampons to stay

22:36  19 june  2017
22:36  19 june  2017 Source:   ABC News

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Many argue the explosion of online shopping was not foreseen when the GST was developed.© Provided by ABC News Many argue the explosion of online shopping was not foreseen when the GST was developed. The Federal Government's plan to sting online shoppers with the GST looks set to come to fruition 12 months later than it would have liked.

The Coalition and Labor have agreed to a plan to apply the GST to imported products worth less than $1,000 from July 1, 2018.

But they have rejected a proposal from the Greens to use the new revenue to cover the cost of removing the GST from sanitary products, including tampons.

The measure was included in the 2016-17 Budget, and forecast to bring in $300 million in revenue over three years.

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Online shoppers searching for bargains from overseas are a primary target, with many arguing the explosion of online shopping was not foreseen when the GST was first developed.

It went before the Senate today, where Labor senator Katy Gallagher argued the initial July 1, 2017 timeline was not feasible.

"It's just inconceivable that the arrangements are in place [for the change to be made] in the next 10 days," she said.

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"I don't think anyone is pretending to believe that that is actually the case."

Labor agreed with the idea in principle, but had questions around the Government's model for collecting the tax.

Shadow treasurer Chris Bowen said their amendment would require the Productivity Commission to review the Government's plans, including the "vendor model".

He said he was partly motivated by the concerns expressed by retailers like eBay.

"Whether they adopt [the Productivity Commission's recommendations] or not is a matter for them," he said.

"But I think if the Productivity Commission adopts or recommends a better way of doing it, it's really incumbent on the Government to take that up."

While Finance Minister Mathias Cormann argued against Labor's changes in the Senate, the ABC understands the amended bill will pass the Lower House.

Harvey: GST plan 'hijacked' by online retailers

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Harvey Norman chairman Gerry Harvey has lobbied for the GST to be extended to overseas purchases for many years.

He argued today's change, delaying implementation for a year, was the result of clever lobbying by overseas internet retailers.

"They've been hijacked," he said.

"The unfortunate thing is that [politicians are] susceptible to this kind of activity, which doesn't say a lot for their mental capacity."

Mr Harvey said all politicians he had spoken to on the matter agreed the GST should be applied to overseas purchasers.

But he said the 12-month delay would only allow them to be further lobbied by the online retailers.

"In that time, these same people that have been lobbying them will be hard at work lobbying them even further, to put it off again," he said.

"What I would say to them is 'listen — you've just been hijacked for one year, don't let it happen again'."

'Tampon tax' to stay

The Greens unsuccessfully sought to use the bill to remove the GST from sanitary items, arguing the new revenue could cover the amount that would be lost.

Greens senator Larissa Waters said the change would still leave the states, who are the direct beneficiaries of GST revenue, better off.

"It is a sexist tax that applies only to women," she said.

"And when you look at the fact that condoms and lubricant are GST-free, and yet sanitary items are not GST-free, women are being taxed for their biology."

The Greens' amendment failed, opposed by both the major parties.

Senator Cormann argued the proposal does not have the unanimous support of the states and territories, while Senator Gallagher said while Labor supported the idea in principle, they did not believe this was the way to do it.

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