Online shopping is about to become more difficult for Australians with GST to be applied to almost all products bought overseas -- and local small business owners are thrilled.
But that won’t necessarily deter shoppers from making online purchases, with consumers citing choice and convenience as two key motivators for continuing to click and collect.
While online purchases less than $1000 were previously not taxed, Treasurer Joe Hockey on Friday announced the threshold would be dropped from July 1, 2017 in favour of a 10 percent GST.
The Treasurer announced the 10 percent increase on Friday.
Perth-based RC Models and Hobbies owner Brian Simpson said the changes would close a loophole that international retailers had been exploiting to get their products through customs without paying GST.
“I paid $45,000 for some goods, and they wrote on the box $600,” Simpson told The Huffington Post Australia.
“Overseas companies know how easy it is to get their products into Australia and escape paying any of our fees.
“That makes it a bit hard for Australian businesses to compete.”
Despite the 10 percent price hike, some shoppers said they were still more likely to buy online than switch to traditional bricks-and-mortar vendors.
According to nurse and mother-of-two Sue Kemp, it’s more about convenience and availability than it is about price.
“You’re quite limited in what you can buy in Australia, and there is so much more choice on the internet,” Kemp told HuffPost Australia.
“Add that to the fact that it’s more convenient. It’s always chaos here with two little ones under my feet.”
It’s not just young mums that agree. Busy uni students also said they’d opt for online shopping, saying student discounts on sites like UNiDAYS meant online purchases would remain cheaper regardless of the GST hike.
“I want it delivered to my door,” said 21-year-old law student Claudia Neal-Shaw.
“I think Australian small business is really important, but often during the semester I don’t have time to source stuff myself,” she said.
Analysis from Fairfax, however, showed the GST hike would make luxury goods more expensive on international websites than through Australian retailers, however popular items like electronics and shoes would remain more affordable online.
National President of the Australian Retailers Association, Russell Zimmerman said the measures are not designed to stop people from buying overseas but to make the Australian market more competitive.
“Consumers will have to pay a little more, of course, but it’s not that big of a deal,” Zimmerman told HuffPost Australia.
"They will be paying exactly the same as any retailer does in Australia."
*Ed's note: A quote about retailers paying GST has been removed from this article.