Last month Assistant Treasurer Bill Shorten confirmed that local retailers could sell goods from outside Australia without paying GST, if those goods cost less than $1,000. The retailers said this was a tax rort but Shorten maintained that any changes to the current rules and enforcing the lower limit rule would cost far more than could ever be raised. In other words Shorten acknowledged that the loophole existed but announced a long term inquiry.

So the limit is going to stay for some time, and retailers should go for it. Myer and Harvey Norman both threatened to sell imported goods over the net from China to take advantage of the Shorten invitation, but they were half-hearted. Again Bill Shorten simply responded by effectively saying: ‘If you want to do that, go and do it. The consumers will benefit.’

Yesterday Shorten went further, saying local retailers’ claims that the low value threshold was responsible for tough Christmas trade in Australia are exaggerated. Consumers are attracted to international online stores because they are convenient, he says, and because offshore retailers have embraced the digital economy and developed sophisticated and consumer friendly business models.

Of course Myer and Harvey Norman, plus a lot of other retailers, have a huge problem. If they went out and promoted heavily the ability to buy goods under $1,000 directly from China, over time they would slash the revenue of their stores.

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