GST Exemption Isn’t Why We Shop Online From Overseas Sites

There are proposals afoot to include GST on purchases made from online overseas retailers. It may never happen, but even if it did, it's unlikely to change Aussie shopping habits, for one very simple reason.

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Mastercard today released survey research which it says shows that even if the GST were levied on imported goods — something that seems unlikely to happen at least in the short term — Australian consumers would remain keen on online spending. The research, which suggests that 12.6 million Australians have shopped online in the last 12 months, says that while 79 per cent of Australians oppose reductions to the current exemption levels, 38 per cent wouldn't actually change their buying habits if GST became a factor.

As with any surveyed research, it's wise to look at the wider numbers. The survey was conducted late last November, when consumers were more likely to be pro-purchasing in any case given the leadup to Christmas. Equally, the survey comprised 1250 Australians; while that's the practical reality of how many surveys work, it still leaves a potential margin of error.

Frankly, though, GST isn't the real reason why we shop online from overseas anyway. This is something we've covered before, but it bears repeating; the gap between local prices and those available from overseas so often exceeds 10 per cent that it isn't funny. GST might be a convenient complaint cry for local retailers, but it doesn't reflect the reality of price comparison in this day and age.

Changes to GST Won’t Stop Australians Shopping Overseas [Mastercard]


Comments

    I'd happily pay a little more to buy from an Australian company, just so long as it was realistically competitive (ie, not 100% markup). The trouble is they just don't have the range. I can't even find places that sell jeans that fit me in Australia.

      This is basically the same reason I buy from overseas.

      Be it CDs from artists no stores in Australia have heard of, certain SKUs of electronics that local big companies think won't sell here or even hobbies that just aren't well represented. All these can currently cost me big money right now to buy from overseas, with or without GST, but at least that's my choice and I can currently justify buying them!

      My fear is that they will impose some sort of import duty, for example making a $10 hobby item that is unobtainable in Australian more like $60 or $110+. Goodbye fun.

        Exactly- the markup on video games is preposterous.
        I literally pay half price on most games- even with postage; and that's not even mentioning the games you just can't get here because of our stupid restrictions (progress is being made I know)

        I got a 3dsxl a month after release in aus at 60% aus retail price.
        especially when buying from other PAL regions, it doesn't matter about game region locks- we are the same.

        For "cultural goods" like music, videos, books, it's the publishers and distributors who are the problem. I'd happily buy good quality digital downloads, but you're often forced to order CDs and DVDs.

      I guess I might be just a bit naive when it comes to shopping offshore. When it comes to clothing etc, I not keen on buying clothes I can't see first hand and try on if I want to ensure a decent fit; and have my reservations about warranty claims for stuff bought outside Australia (I returned a pair of a-Jays Four a few months back that I bought from a UK retailer - cost me $12 in return postage only for them to end up refunding me $35 instead of replacing the product).

      I hate the idea that I could be paying up to and over double for the same item that I can get cheaper offshore though - my wife is currently looking at getting a LeapPad 2 for one of our kids, and I'm disgusted how much they cost domestically vs overseas.

        I'm generally with you - however, if your an irregular size, you going to have to blind order locally too. I've basically found one pair of jeans that fit me properly in five years (tiny ankles, massive thighs).

        Yeah I hate ordering without trying on as well, but when there's nothing in-store to try on you don't have much options. I've purchased jeans in the past that when they arrived were completely the wrong size or style for me. You just have to accept that as a loss and move on.

        Yeah, clothes are the only thing I don't buy online, but I don't have an weird size and am not a brand whore so I can get what I want here easily enough.

    The cost the GST is no where near enough to explain the discrepancies in price.

    I buy online for convince or for can't get retail as primary reasons before it comes to price though.

    It's not even just prices that sees me buying stuff online: I buy Lego in stores, but I also buy Lego online. Why? Cause the stores don't stock much in terms of variety as well as older Lego.

    While it might not be why we shop overseas, its introduction might stop us. Not from increased cost, but because the online retailer will have to collect it (and for them, given the choice between registering in Australia to collect and pay GST or ignore Australian orders, it'd be far easier to just not sell to Australian customers).

    Alternatively, if the GST is levied on customers after the good hit our shores - by Customs, I guess - then you can imagine the delays and problems. Do the couriers stump up the cash to clear it, then provide it to you COD? Do you have to pay it, then arrange delivery? Does the online retailer still organise the courier, but you have to wait for Customs to bill you, then you have to contact the courier to let them know they can proceed to deliver it to you?

    Regardless, retailers and wholesalers (and most often, it's the wholesalers who are the real bad guys) aren't arguing for this because they see the GST they pay as an unfair disadvantage - it's just a means to an end. They want to kill online purchasing from overseas retailers so that they can return to the good old days of outrageously gouging Australian consumers. The alternative is they have to adapt to the new cost of doing business (that doesn't include demands to reform the Fair Work Act to pay peasant wages as a way of cutting costs), most won't, and a great many will go bust as a result.

      I used to work in the call centre of a high end UK based fashion website, which shipped internationally. In cases where there were extra charges to be paid, usually it was held by customs who contacted the customer directly through the mail and would be released to the courier company once the charge had been paid.

      Was always extremely annoying to have customers calling from these countries begging us to "just write 'gift' on the box".

    eBay sellers in particular have become really good at avoiding import duties in other countries, just sayin' - this might be very difficult for Australia Post/Customs to enforce.

    I don't buy much from overseas, I try and get it from Australian sellers whenever i can. There are tonnes of circumstances where the product you want isn't available here - what about specific clothing promoting a brand or a website - you can't just go down to Myers and pick up a bassdrive.com hoodie now can you?

    Australian online retailers already pay GST - taxing overseas websites won't stop Mobicity or Kogan from selling a phone to me for $550 that costs $950 from Telstra.

    It's for these reasons that I doubt this is ever going to happen - do a survey on what % of online shopping is from businesses here in Australia - I think the troublemakers behind this (read: Gerry Harvey) might get a big shock.

    Last edited 23/01/13 12:16 pm

    What affects my decision to purchase locally and overseas isn't GST either. It's warranty, delivery time, availability and price.

    * Warranty: If it's something I think I may actually ever be required to use the warranty for, I don't buy overseas (most computer parts, electronics, camera equipment etc). International shipping from Australia is expensive and I don't want to have to do that just to get a product looked at under warranty.
    * Delivery time: If I want it in under a week, I buy from an Australian store. If I don't mind the wait, I'll happily buy from overseas. If any store inside Australia takes more than 5 business days from time the order is placed to arrival on my doorstep, I refuse to make any further purchases from them anyway as there's no excuse for that.
    * Price: This one's obvious. If it's significantly cheaper (including shipping) I'll buy from overseas. If it's roughly the same price, I'll weigh up the convenience of receiving it faster, if it's exactly the same price, I'll buy here.

      Getting warranty service on some goods (cameras, notably) in Australia is such a fight that I've come to the conclusion it's easier to replace the item and move on, so I may as well get the item cheaply overseas.

        I haven't had to go through the process yet, it's more a "just in case" thought that makes me behave the way I do. That's interesting, the only problems I've read about are on third party warranties, which doesn't really surprise me and is why I try to avoid them. Manufacturer ones I haven't read many horror stories on so assumed they tended to be better.

          After I posted, I realised that the only time I've needed warranty repairs was with products bought in Australia. Everything I bought overseas or online has been trouble-free.

    “The challenge for Australian retailers is to deliver where overseas retailers cannot – service, delivering a personal approach – and there are so many local retailers who get that absolutely right.”

    I'm not so sure if there are that "many" retailers that get it right.
    BTW, does Myers actually train their staff; do they even care? What about DSE?

    It is not just the price difference that drives us to shopping online from overseas sites. In some cases, the item that we are after, especially the desired configuration or colour, may not be available in this country at all. We see this a lot with tech goods like computers where we get a subset of the product range globally available.

    What ever happened to that thing that the government were doing with prices of computer software and hardware?

    I just bought a new camera from Hong Kong online, delivered $2800 with 2 year international warranty, if something breaks i send it back free of charge and they fix it, it may take longer, but the same camera here $3800.... with 1 year "AUSTRALIAN" warranty... ummm ok I know where im spending my $$$

    i found an accessory that my grandfather wants for his fishing rod, landed $2.50 each, in australia, $35 each.
    why would you buy here?

    If there was a way to voluntary pay GST on overseas purchases I would gladly pay 20% on the things I have purchased as it is still well below the often 1000% more than I would have had to pay to buy it in Australia.

    I've been running a business importing and selling Chinese Android tablets (Ainol, Sanei, Cube, Ramos etc.), my markup is 25% on equivalent Chinese prices, including courier shipping. I don't make a fortune, but it provides a steady secondary income stream. People are willing to pay a bit more for local service and knowledgeable support.

    A huge part of the problem in this country is caused by the many layers of middlemen for many products, all of whom are adding a significant margin but adding little or no value. Retail prices at 40-60% above those found in Europe/US are outright gouging , nothing more, there's simply no excuse for that level of price hike, especially for the utterly crap customer service most Australian businesses provide.

    Last edited 23/01/13 4:49 pm

    If the lack of GST is one of the main reasons Australians buy from overseas (which I don't agree with) then I would be really interested to see how competitive Australian companies are when they sell to the overseas market (if in fact there are many Australian selling internationally at all......)

    Does anyone know where these statistics may be found? Maybe that's an article Alex can look into?

      Well they don't bother selling much in the way of books, music, video etc - Australia may as well not exist in most of these segments.

    I recently went to purchase a new pair of running shoes at a Westfield in Australia and was shocked at the prices. $200 for a pair of Nikes, on top of which they only had 2 colours/styles and didn't have my size in stock for one of the colourways. Not to mention that I, the customer, had to actually go and locate a salesperson willing to help me. I went home and looked up eastbay.com (a US site), and the same pair of shoes were $90, and they about 11 different colours, all sizes in stock. Even with $25 postage, I saved $85. Eighty-five freakin' dollars. I got my shoes in 5 days, with a discount coupon for my next purchase.

    And Australian retailers wonder why people shop online.

      But, but but with +GST youd pay an extra 10$!..... yeah still worth it. lol

    Most of my purchases from overseas have been LEGO sets, which I got back into a few years ago. The stock in Oz is just all over the place, completely different between stores of even the same company. Kmart in particular are shocking.

    So what do you think will happen when Retail sector goes down and Millions of Jobs go under. When your kids ask why they cant get a job. If you do some research, you will see why prices are what are.

    I import action figures/toys from Hong Kong to Australia. I have them at competitive prices but still people buy them from overseas as they perceive it as being cheaper.

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