GST on online goods not all bad

GST on online goods may reduce our shopping options, but it’s not all bad news, writes

Tim McIntyre

ONLINE shoppers are headed for a taxing time in the new financial year, with overseas purchases under $ 1000 to be slugged with GST. In the long term, there may be benefits, but the short term may see a mess of confusion and undelivered goods, retailers say.

The first effect will be fewer products coming from abroad and therefore less range for Australian consumers, said online retailer’s Catch. com. au chief executive Nati Harpaz.

“The feedback from the US chamber of commerce is that some brands are going to stop selling into Australia,” he said.

“The extra administration from their end may not be worth the effort.”

Overseas retailers continuing to sell to Australian buyers will likely raise their prices so the market absorbs the cost.

“If they have the margin, like on fashion items for example, they may absorb the price, but not for smaller goods with no margin, like cameras and electronic products,” Mr Harpaz said. “The prices will increase by 10 per cent unless the seller takes a hit.”

The short- term confusion for some sellers may even result in purchased goods being stopped by authorities.

“A lot of US and Euro

Some mistakenly thought a high income or savings balance equalled a positive report.

“You could have a lot of savings … but a bad credit report,” Mr Laing said., “because you were careless about paying financial accounts on time.”

Credit reports are made up of personal details, plus information about any credit accounts, credit cards, personal loans, mortgages or car loans you have and your repayment history on them.

They also note any credit applications, default information, overdue payments, or other serious credit infringements.

Reports are usually checked when you apply for credit; for a store card when buying something on finance; for a car loan; a mobile phone plan; or a gas or electricity account.

A credit report should ideally be checked annually and can be obtained free from a credit bureau such as Equifax ( formerly Veda), illion or Experian.

Credit Card Compare’s co- founder David Boyd said once obtained it can be improved.

“Check out problem areas such as outstanding bills … then act immediately by lowering your credit card limits, consolidating multiple personal loans and or credit cards,” he said.

An improved credit report may see consumers rewarded with a better deal, especially with competition between lenders.

Ms Loyez said, “With positive and negative data, it will be easier to tailor an interest rate to an individual and with increased competition, banks will need to come to the party.” websites are not aware of the ruling, so won’t charge the GST,” Mr Harpaz said. “There is a good chance that the goods will be stopped at the border if the GST has not been paid.”

But overall, the changes will provide a great opportunity for local businesses.

“There is an opportunity for local retailers and online players to extend their range, or import goods from overseas and sell them locally,” Mr Harpaz said.

Consumers are more likely to return to local retailers with that price adjustment, which will come with some benefits, says Katrina Haskew, managing director of financial advisory Leading Advice.

“Purchasing locally will often take far less time and has the added benefit of knowing you’re giving to an Australian business,” she said. “You’re also far more able to take action if the goods arrive damaged or aren’t what you were expecting in the case of delivery.

“You’re far more able to buy extra parts if required and you can also talk through benefits of different makes and models with a salesperson.”

There will also be benefits to the Australian economy, which will trickle down to consumers, according to Aaron Basin, head of corporate development at online consumer lender MoneyMe.

“It’s expected that the tax will benefit local Australian retailers by levelling the playing field and reducing competition. Taxing overseas behemoths … will also bring in large tax revenues to Australia,” he said.

“( This) should have a positive flow- on effect.

“Some retailers ( may offer) other incentives to keep Australian traffic coming to their sites … you just need to know where to look.”