This was published 10 years ago
How GST changes, drop in dollar raise online shopping prices for Australians
Updated ,first published
- Push to drop GST threshold on online shopping from $1000 to $20
- Retailers dismiss talk GST collection too costly
- Tony Abbott prefers GST rise over Medicare levy increase
State and Commonwealth leaders meeting in Sydney have agreed to extend the goods and services tax to low-value imported parcels.
The decision means Australians enjoying the lower prices offered overseas will soon find themselves paying GST, the same as when they buy goods from Australia.
This, combined with the weakening Australian dollar, may find some online shoppers forced back to Australian prices.
The leaders have already agreed to extend the GST to digital imports of movies, books and software from 2017.
Thursday's decision will lower the GST-free threshold from $1000 per parcel to as little as $20.
A meeting of state treasurers next month will set the new threshold.
It is unclear when the GST will begin to apply.
From running shoes to electronics and luxury watches, the price of goods bought in US dollars and shipped to Australia has surged as a result of the tumbling Australian dollar.
The dollar was trading at 73.8 US¢ on Wednesday, nearly one-third down from its value 12 months ago when it bought 94.3 US¢.
We've selected 10 examples of some of Australia's favourite overseas online purchases and compared how much they would have cost a year ago when the Australian dollar was stronger, the prices today if the items were subject to the GST, and the current Australian prices.
As the chart below shows, if the GST-free threshold is lowered, only one item - the digital camera - will remain cheaper to buy from an overseas online retailer.
1. eBook
Harper Lee's Go Set a Watchman (Kindle edition)
One year ago: $11.24
Now: $14.29
With GST: $14.29 (Good news. It falls under the $20 threshold.)
Difference compared with one year ago: $3.05
Australian price: $14.39
2. Footwear
One year ago: $207 (incl. $45 shipping)
Now: $263
With GST: $289
Difference compared with a year ago: $82
Australian price: approx. $290
3. Camera
Olympus OM-D E-M1 Mirrorless Micro Four-Thirds DSLR, Body only
One year ago: $921 (incl. $50 shipping)
Now: $1171
With GST: $1288
Difference compared with a year ago: $367
Australian price: approx. $1410
4. Sports equipment
One year ago: $664 (incl. $177 shipping)
Now: $845
With GST: $929
Difference compared with a year ago: $265
Australian price: $780
Difference compared with a year ago: $35
Australian price: $110
6. Jewellery
Hand engraved micropavé diamond engagement ring
One year ago: $7545 (free shipping)
Now: $9591
With GST: $10,550
Difference compared with a year ago: $3005
Australian price: $8950
7. Video game console
One year ago: $467 (incl. $48 shipping)
Now: $594
With GST: $653
Difference compared with a year ago: $186
Price in Australia: $549
8. Watch
One year ago: $3984 (incl. $55 shipping)
Now: $5065
With GST: $5571
Difference compared with a year ago: $1587
Australian price: $4844
9. Handbag
Givenchy Antigona Medium Sugar Satchel Bag
One year ago: $2432 (free shipping)
Now: $3091
With GST: $3401
Difference compared with a year ago: $968
With GST: $739
Difference compared with a year ago: $211
Australian price: $735
Prices current at July 22, 2015, for selected retailers only.