Watch out: online shopping is about to cost you

Been eyeing some cut-price Nike shoes or new camera gear in an online store overseas?

Make sure you buy that item in the next 24 hours – from Sunday, it will cost 10 per cent more, with GST to be added to all internet purchases from abroad.

Online shopping now accounts for 8 per cent of all retail sales, but Australian retailers have long been unhappy about having to compete with cheaper imported goods. Applying GST to those goods would create a more level playing-field, they argued.

According to a 2018 report by Australia Post, Inside Australian Online Shopping, Australians spent more than $21 billion shopping online in 2017, an increase of 19 per cent over the previous year, and by 2020 it’s expected that one in 10 items will be bought online.

In a survey of 125 people on social media, 99 per cent said they had shopped online at some point, with one-third doing so weekly.

Of those surveyed, just over half said they preferred shopping online to in-store, with the most common reasons being convenience (72 per cent), saving money (51 per cent) and to get products that aren’t available locally (48 per cent).

Until now, GST has only been charged on overseas online goods worth more than $1,000. The Federal Government last year passed new GST legislation extending GST to all imported goods regardless of price, following pressure from Australian traditional and online retailers who are obliged to charge GST on their products and services.

As of last July 1, GST has already been added to digital goods and services, including streaming platforms such as Netflix and Spotify, and on imported goods sold by Australian retailers. After being pushed back a year, the same will now apply, from July 1 this year, to imported goods sold by international retailers, although it will only affect businesses with a turnover of more than $75,000.

While most people surveyed agreed the move would be beneficial for Australian businesses, more than one-third thought it unfair.

As consumers worry about being hit with inflated prices and restricted products, the main players in the industry are working out how to comply with the change. Amazon has already warned it will geo-block its international sites, allowing Australians to only access the local site.

Speaking in a suburban Sydney shopping centre, one former small business owner, who gave her name only as Lisa, said she believed the changes would mean a fairer platform for local businesses and international companies to compete in the same market.

“I was annoyed when I found out the big businesses weren’t paying our taxes and we couldn’t compete because we had to put our prices up to pay our tax,” she said.

But as a consumer, while she only shops online around birthdays and Christmas, the 45-year-old said the changes were frustrating, considering we already get stung with delivery costs and, often, unfavourable exchange rates.

“I only shop online for things I can’t get here [in Australia]. If it was offered here, I wouldn’t need to buy it online.”

Despite the changes, nearly 45 per cent of people surveyed said they were unlikely to change their shopping habits.

Keen shoppers should also remember that the financial year ends tomorrow – so if you’ve hankering for something, get out and hit those EOFY sales – @taylaobrien13

About Tayla O'Brien 15 Articles
Upcoming journalist hoping to make a difference in the world. Follow me on twitter @taylaobrien13.