Wednesday, 21 June 2017
Treasury Laws Amendment (GST Low Value Goods) Bill 2017; Consideration of Senate Message
That the amendments be agreed to.
This is a matter that the government has been determined to see legislated through this parliament for some time. It is a matter that will enable a level playing field for Australian retailers to be able to compete on the same basis as those who are seeking to sell goods into Australia at low values that do not attract GST. This is an important area of levelling the playing field for small business. I am pleased that we have been able to get to the point where we have, through the Senate, and for these amendments to be coming back to the House that will enable this matter to be determined.
I note that, as part of that arrangement, there was a request and a requirement that a Productivity Commission inquiry be undertaken into the collection methods for this tax to be applied to these low-value goods. The government has gone through extensive consultation in arriving at the method of collection. In the spirit of ensuring that these measures can be legislated to ensure that that certainty is there going into the future, then that commission will be undertaken, consistent with the amendment that is before the House, but I want to make one thing very clear. The government's policy is to implement this collection on the basis of the vendor method. Those involved in this area should understand that. They should take the actions that they now need to take to prepare for the implementation of this on 1 July next year on the basis of the vendor method. The government will not be looking kindly if others come six months from this date or beyond and say, 'It's all getting too hard to implement this again. We're going to have to delay.' There can be no further delay on this. This must be implemented.
I am pleased that we have been able to come to a position through the Senate that will enable this new measure to be put in place and legislated. Now we simply have to get on with it. The sector has to get on with it. The systems have to be put in place. The collection method will provide I think a real model, not just here but in other jurisdictions, as jurisdictions around the world seek to deal with the moving feast that is the tax base of developed economies. This is an important change that will now enable these economies to deal with those significant changes.
This does provide the certainty that I think is necessary. We are pleased to have been the government that has brought these changes into being. It is regrettable that they could not have been done earlier than this time and that they now will not come into effect until 1 July next year. The fact that they are about to become law in this country is a welcome development. We appreciate working with other members of the parliament to achieve that outcome.
The Productivity Commission will look at all of this material and they will report promptly by the end of October. It is very important that we require GST to be paid on low-value goods. It will level the playing field for Australian businesses to compete with overseas retailers. It is an overdue measure. It is important to protect the integrity of the GST base. We have done the work to determine the best model for Australia that balances the needs of consumers, the timeliness of clearance of goods at the border and the impact on businesses in the supply chain. We cannot burden our domestic businesses with the current inequitable arrangements while we wait for the technology to catch up and support other hypothetical models. We do not believe another review will deliver superior models, so it is important that we all get on with the job of implementing.
Other jurisdictions are already taking action and they are focusing on taxation of goods by the vendor at the point of sale. This is why from 1 January 2018 Switzerland will be requiring vendors to collect GST or value added tax on low-value imports. Vendors are already required to charge and collect GST or VAT on sales within the European Union. The OECD and EU also recognised in recent reports that there can be no substantive reform without a focus of taxation of goods by the supplier at the point of sale, so that is what we are taking action on. It will be well received I think by the states and territories. I thank particularly the state and territory treasurers for their support for this measure, which at the end of the day will mean more revenue for them for schools, hospitals and other essential services.