National Retailers Association claims overseas online sales cost local retailers up to $100,000 a year

The National Retailers Association has released a survey claiming that consumers buying from overseas websites are costing some retailers up to $100,000 a year in lost turnover.

The survey comes as Treasury figures claim that the GST savings made by consumers shopping overseas – and the amount the Government is losing in GST tax revenue – could be as high as $1.3 million a day.

“The number of parcels entering Australia under the low-value importation threshold has risen in recent years, and is likely to increase further as online shopping becomes more prevalent,” the Productivity Commission said in an issues paper on the GST exemption that exists for goods purchases from overseas valued at less than $1,000.

“In 2010-22, the GST revenue foregone has been estimated at $460 million, rising to $610 million in 2013-14, although Treasury noted that the estimate reliability was ‘low’,” the report said.

Treasury says lost GST revenue from overseas sales is likely to be $500 million in 2011-12 and $550 million the year after.

Meanwhile, The Australian newspaper reports that a National Retail Association survey of 156 small- to medium-sized businesses showed 19% of these retailers believe they have lost between 30% and 50% of their sales, while 44% had lost 10-30%.

Of the 76 respondents who nominated a dollar figure of lost sales, 54% said sales lost amounted to more than $100,000 a year.

NRA executive director Gary Black said that Australians were spending between $5 billion and $10 billion a year online on tax-free imports.

Another retail lobby group, the Fair Imports Alliance, which comprises a number of retail bodies including the Australian Retailers Association, has vowed to proceed with its campaign for the Government to drop the GST exemption on goods purchased from overseas, despite the Productivity Commission’s discussion paper last week saying preliminary evidence suggested even a large reduction in the threshold might not “necessarily have a significant impact on the number of parcels not subject to GST and duty.”

The Fair Imports Alliance this morning called for more information on the Government’s view that a decrease in the threshold is not administratively or economically feasible.

Australian Customs is doing a review on online imports, but the Alliance claims Customs has been unwilling to share data on the size of the problem.