The Australian federal government is reportedly considering plans to impose an A$5 tax on overseas parcels coming into Australia, to cover the costs border security and screening checks,
the Canberra Times reported.
Parcels containing purchases like clothing, makeup and books worth less than A$1000 - which now represent 90% of deliveries entering Australia - would attract the new tax.
A discussion paper obtained by Fairfax Media shows the Department of Home Affairs is considering ways to balance the bio-security budget, which is under pressure by the explosion in small parcels
entering Australia from overseas retailers. Some 38.7 million parcels worth under $1000 each were imported to Australia last financial year - a 22% increase on the previous 12 months.
Ending cross-subsidisation
The department predicts the number of low value consignments entering the country will increase by a further 31% over the next four years, compared with only 10% expected growth in high value
consignments.
Industry sources said after negotiations with the government, they expected a flat rate of about A$5 per parcel, significantly less than the A$90 levy currently charged on all deliveries worth
over A$1000.
"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," a discussion paper dated February 2018 noted.
"Existing cost recovery arrangements are no longer sustainable and will not support Australia’s future trading environment."
“Not in the spirit of free trade”
The paper shows freight and express couriers would wear the bulk of the levy, along with any individuals who import more than 1000 items a year.
Applying an A$5 per parcel tax would boost the budget by up to $200 million in the short-term, growing over time as more parcels arrive in Australia each year.
A spokesperson for eBay was quoted as saying that the online marketplace had “serious concerns over any proposed levy”, arguing that it “will hit consumers hard and is not in the spirit of free
trade”.
Meanwhile, the chief executive of the Global Trade Professionals Alliance, Lisa McAuley has warned that the new levy could spark a retaliatory move from other countries, including China (one of
the primary sources of the e-commerce parcels coming into Australia).
McAuley was quoted as saying: “There is a real threat that if Australia introduces this measure domestically, other countries will reciprocate and that could be very damaging for many small to
medium enterprises that have been able to expand into international markets.”
Nol van Fenema
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