Online shopping could soon be that little bit more expensive.
Online shopping could soon be that little bit more expensive.

Australians to be hit with shopping tax

THE cost of online shopping could be about to rise dramatically thanks to a new government proposal.

The Department of Home Affairs proposal would see a $5 tax imposed on every package containing items worth less than $1000 sent from overseas.

If passed, the tax would affect 90 per cent of deliveries entering the country.

The revelation was made in a discussion paper as reported by Fairfax media.

The news comes as online shoppers brace themselves for GST to be introduced on small online buys, which will come into effect from July 1.

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According to Fairfax, the proposed tax has been suggested as a means of balancing Australia's biosecurity budget, which has taken a serious hit as the popularity of online shopping rises - during the last financial year, 38.7 million packages worth less than $1000 each entered the country.

The represents a 22 per cent rise from the previous year, and the Department of Home Affairs is expecting that figure to keep growing rapidly.

"As the volume of imported low value consignments continues to grow, so too do the costs of biosecurity, cargo and trade border activities for those consignments. This has created increasing inequity and cross-subsidisation, where importers of high value consignments are paying for the border activities attributable to other users," the Sydney Morning Herald reported the February 2018 discussion paper as saying.

"Existing cost recovery arrangements are no longer sustainable and will not support Australia's future trading environment."

While the paper stated that freight and express courier would be hit with the majority of the tax, Freight and Trade Alliance director Paul Zalai told Fairfax Media the cost would then be passed on to shoppers.

"We expect the cost of the levy per parcel to be in the dollars not the cents," he said.

The $5 online shopping tax would give the budget a $200 million cash injection - but it could come at the expense of consumers, with some experts claiming the tax combined with the GST would double the cost of some online buys.

Mr Zalai told Fairfax Media the tax could be met with retaliation from nations that regularly post items to Australian shoppers.

"We should not be surprised if local small to medium exporters face reciprocal charges administered by foreign jurisdictions - a less than ideal outcome in an environment whereby our government is otherwise going to great lengths to remove trade barriers," he said.

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