GST change could cost Aussies shoppers extra $583m per year
New research from Finder.com.au suggests Australian consumers could spend an extra $583 million on goods from overseas retailers, if retailers pass on the cost of GST to their customers.
The new GST law went into effect on Sunday, 1 July, and requires overseas retailers to charge GST on goods shipped to Australia worth less than $1,000. Previously, retailers only needed to charge GST on purchases valued $1,000 or more.
According to new research from Finder, 73 per cent of Australian shoppers have made a purchase worth less than $1,000 from an international store in the last two years.
Spending on average $80 per purchase at an average frequency of five times per year, shoppers collectively spent an estimated $5.8 billion spent on international purchases in the last 12 months.
Had the tax been completely passed on to consumers, Finder noted that Aussies could have spent an extra $583 million on online purchases from sites like Asos, Boohoo, Net-a-Porter and Marks & Spencer.
Finder’s money expert Bessie Hassan said it is unclear which retailers will absorb the tax, which will bump their prices up or which will stop shipping to Australia altogether to comply with the new law.
“Australians love shopping online so it’ll be interesting to see whether this tax deters some from spending with overseas retailers. Others might turn to local stores instead, which would give the retail industry a much needed boost,” she said.
According to the research, 86 per cent of Gen Y consumers purchase overseas goods online, more than the 80 per cent of Gen Z, 74 per cent of Gen X and 61 per cent of Baby Boomers who do the same.
Men spend significantly more than women, forking out on average $91 per purchase in comparison to $66 per purchase.
In addition, 16 per cent of respondents only shop online from local retailers, and a further 11 per cent don’t shop online at all.