Turnbull's Online Shopping Tax Drives Out Amazon

Malcolm Turnbull's new online shopping tax has driven one of the world's biggest retailers out of Australia...

The Turnbull government’s online shopping tax which applies a 10 per cent GST price spike to imports worth less than $1000 and forces online platforms to collect it themselves, has claimed a major casualty. Aussie shoppers will soon be blocked from the American Amazon website and other foreign Amazon sites. Shoppers looking for the sites will instead be redirected to Amazon.com.au which features only a paltry fraction of the 500 million plus products offered on the main site.

Amazon clarified on Thursday, that the domains would cease shipping to Australian addresses from July 1 onwards, the initiation date for the online shopping tax.

The Australian Taxpayers’ Alliance has strongly opposed the online shopping tax – an attack on free commerce that puts needless pressure on the cost of living for hundreds of thousands of middle-income Australians. Last year, we provided evidence to a Senate inquiry that the tax would not make Australian retailers competitive, would not raise a significant amount of revenue for the government and that the cost of implementing the tax would force major online platforms to exit the market or cease serving Australians entirely. Now we see these consequences in action.

 

The tax was also opposed by an international coalition of over 16 taxpayers’ advocacy groups amidst fears of tariff retaliation from our trading partners which could trigger punishing changes for online shoppers worldwide. It even prompted concerns from the Labor opposition.

With another federal election on the horizon, the online shopping tax is a failure by the government to prioritise the interests of working Australians and their families. Instead, we see capitulation to intense lobbying by major retailers whose products remain significantly more expensive on average than similar goods available online overseas due to a combination of burdensome local pressures such as zoning laws, electricity costs, strict labour regulations and red tape – according to research from the Institute of Public Affairs. Unfortunately, there have only been minor attempts by state and federal government to rectify any of these underlying factors.

As a result, consumers suffer due to higher prices at the behest of well-funded special interests.

Abolishing the new tax will ensure that Australians continue to enjoy access to affordable online products and the same consumer choice enjoyed by billions of people in other countries. It would also fit nicely with the government’s purported policy agenda of company and personal income tax cuts which are meant to let taxpayers keep more of our own money.

 

Satyajeet Marar is Director of Policy at the Australian Taxpayers' Alliance

[This article first appeared in The Spectator Australia]

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