The consumer group Choice says the government may be set to use a legislative loophole that would require ISPs to block local access to overseas retailers that refuse to include Australian GST in the price of goods that are under the $1,000 low value threshold (LVT).
At present, goods purchased online from overseas retailers that are over the LVT are required to include GST. This is set to change from July 2017 under new regulations that will require the GST to be included in all overseas online purchases, including small ones. GST will also be required to apply to intangibles.
The report from Choice (read it here) says the government has not released any modelling on the impacts of this new system, and they have not revealed how it may affect consumers, although a number of reports have examined the broader implications of lowering or eliminating the LVT. For example, the 2011 Productivity Commission report on the Australian retail industry and the 2012 Low Value Processing Taskforce report.
Choice explains that the measure would work under a section (s313(3)) of the Telecommunications Act 1997, which requires the telecommunications industry to assist government agencies in efforts to uphold Australian laws.
“This section of the Act has been used by various government agencies,” the Choice report says, “including the Australian Federal Police and the Australian Securities and Investments Commission, to block access to websites.” According to Choice however, neither Treasury nor the ATO have confirmed the claim.
“Consumers buy a range of specialty products from overseas-based online stores. These include niche cosmetics brands like Charlotte Tilbury or Glossier, and non-standard sized clothing brands like Long Tall Sally and Pink Clove,” says Choice head of communications Tom Godfrey.
“If the federal government is going to start blocking these websites, it will disadvantage local consumers while providing absolutely no economic benefit to Australia.
“These products are not available in Australian stores. If the websites that supply them are blocked, consumers will lose out.”
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