The National Retailers Association is set to provide a new submission to the Productivity Commission’s inquiry into the retail industry, after it said the draft report did not adequately address the issues surrounding the import-free GST threshold.
At the heart of its new submission will be an attack on the inefficiencies at Australia Post which the NRA claims mean the Government is unable to cut the GST-free import threshold. The body wants to increase pressure on the Government and Commission to fix the problem.
Executive director Gary Black says a submission handed to the Commission just two days before the draft report was released does not constitute a response, and that it will be addressing the Commission’s findings soon.
“In a sense, it’s quite a dysfunctional report that comes out and addresses 10 and 15 issues, and almost seeks to trivialise or downgrade the importance of the customers and tax issue,” he says.
“That was very disappointing.”
The Productivity Commission’s report outlined a number of different issues facing the retailing industry, including the current nature of the GST-free import threshold.
However, it said minimal revenue could be gained from lowering it, due to inefficiencies at Australia Post. It said the process for identifying articles that are worth above $1,000 is “an intensive physical process” which requires checking each article.
“While this process is underway, Australia Post retains possession of the parcel. Secure storage of these parcels is occupying increasing space in international mail gateways,” it said.
The Commission’s report said these inefficiencies should be addressed no matter what happens to the threshold.
Black also dismisses comments within the report that lowering the threshold would be merely a symbolic issue, and that due to inefficiencies new revenue is unlikely to be found.
“We’re vigorously opposed to that conclusion, [that the gesture is symbolic]. We wrote our submission in March and said that the case for the elimination of the threshold is impeccable.”
“Having read most of the submissions, the majority ask the Commission to deal with this issue. And that ranking of the GST issue as being one of the less important items was a serious and deficient conclusion.”
Black has also criticised the fact the Australia Post submission was not made public.
“I think it’s a questionable process where one of the key players is able to influence the Productivity Commission yet other’s whose interests will be affected are not able to evaluate what has been said.”
“This is critical when you consider the Productivity Commission found that the cost of collecting GST would exceed the revenue generated.”
Black says the new submission will contain comparisons to jurisdictions such as Canada and Britain, where tax-free thresholds are low.
“They are able to adapt or develop operational or processing practices which are effective.”
“There are a lot of unanswered questions around this, and the conclusion that we just simply cannot institute a processing system for payments that is practicable sort of defies belief.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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