Govt puts e-commerce under the microscope

Government to enforce customs compliance in 2011 as part of new research into the future of Australian retail

Govt puts e-commerce under the microscope
Govt puts e-commerce under the microscope
December 20, 2010

The Government is set to crack down on businesses reporting the $1,000 low-value threshold next year
as it undertakes new research into the future of Australian retail, including online shopping.

As announced over the weekend, the Federal Government has launched an inquiry into the country’s retail sector by the Productivity Commission.

Assistant Treasurer, Bill Shorten, released the Terms of Reference for the Productivity Commission inquiry on Saturday (December 18), which will report to the Government and industry in 2011 on the implications of globalisation on the Australian retail sector.

The Commission will examine the current structure, performance and efficiency of the retail sector and the drivers of structural change in the industry, including globalisation, increasing household and business access to the digital economy, changing cost structures, employment issues and the exchange rate.

It will
also consider the broader issues posed by an increase in online purchasing by Australian consumers and the role online purchasing plays in providing consumers with greater choice, access and convenience.

Running alongside the inquiry will be a compliance campaign to ensure GST and customs duty concession for imports with a value of $1,000 or less are not being abused or exploited.

The campaign will start from the beginning of next year.

Industry bodies have come out in support of the Productivity Commission review, with the Australian National Retailers Association (ANRA)
claiming it will shine a light on the importance of the retail sector.

"Cautious post GFC Australian shoppers and the impact of interest rates, the skyrocketing Aussie dollar and the surge to online shopping overseas have created a very difficult environment for our retailers and a wide ranging review of the prospects for growth and the barriers to retail prosperity is long overdue," ANRA CEO Margy Osmond says.

Osmond claims online shopping has grown dramatically and says the focus on overseas online purchases is both timely and necessary.

"It is not a ‘one size fits all’ issue with a single solution and the Government’s approach – with a view to keeping Australian retail successful next year and in 25 years time is a good start," she says.

"This inquiry will give the sector an opportunity to explore the barriers to better growth in the industry."

Peak retail industry body the Australian Retailers Association (ARA) has also applauded the Government’s pragmatic approach to evidence based policy.

ARA Executive Director Russell Zimmerman says retail associations have been calling for a review of current importation regulations for several months and working with the Government to provide an informed approach to the ongoing prosperity of retailers across the board.

"The broader retail community doesn’t want a knee-jerk policy decision to the GST threshold on imports that doesn’t take into account misuse of the current system or the changing face of Australian retail," Zimmerman says.

He says there are three "very important components" to the Government’s announcement over the weekend.

"The first was a customs compliance campaign beginning in early 2011 which will address the problem of some players rorting the system, as well as a lack of enforcement of current importation regulations. Whatever the GST importation threshold is, it needs to be properly monitored and enforced."

The second part of the inquiry will look at where the $240 billion retail sector is heading; while the third component is the announcement of an online retail forum in early 2011 to encourage and support Australian retailers to explore online options.

"This is essential for retailers to be able to increase their market share on a global scale," Zimmerman adds.

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