Retailers meet with government over changes to low-value threshold

The retail industry has been meeting with the federal government and is hopeful changes will be made to the import low-value threshold, which it argues allows offshore retailers to gain an unfair advantage over local shops.

The low-value threshold was shot down in the Productivity Commission report on the retail sector, which said policing a lower threshold would cost more than it gains. But Australian Retailers Association executive director Russell Zimmerman told SmartCompany the group is hopeful.

“We met with a number of people yesterday, and we put forward our value [that] the threshold needs to be reduced.”

“I need to be careful and stress that it’s not certain anything is going to happen… but hopefully the government will look at ways in which it can assist retail to ensure there is a far more level playing field.”

The current import threshold is set at $1,000. Any items imported into Australia that cost over that amount must pay GST.

This means offshore retailers, who typically sell lower-priced items, are not paying GST. Retailers already suffering because of the massive consumer shift towards these offshore retailers – caused in part by the higher dollar – say this is unfair.

A report released earlier this year by the National Retailers Association claimed that eliminating the low-value threshold could create jobs, and that 118,000 jobs were on the line if the threshold is not reduced. The report thrust the issue back into the spotlight.

Zimmerman says a taskforce has been put together and is studying other import restrictions in different countries.

“Without a shadow of a doubt, Australia has the highest threshold of any country in the world and we’ve discussed how other nations manage to control that threshold.”

“So it’s been very positive, and we strongly believe we are better working with government rather than making a lot of noise out in the open about what we think will happen.”

While Zimmerman says he’s not keen to make any promises, he says he’s “reasonably comfortable the government will do its best”.

“The government is concerned to ensure the threshold is fair and equitable. And whether that means a reduction, or anything else, that will be decided in time.”