New tax could see shoppers paying even more for overseas parcels

Aussies may have to pay more to receive parcels from overseas under a new federal government plan to cover rising security screening costs.

The proposal, contained in a discussion paper obtained by Fairfax Media, would see Australian shoppers pay a $5 tax on top of shipping costs to receive “low value consignments” such as clothing, makeup and books worth less than $1,000 – items that make up 90 per cent of deliveries entering Australia, Fairfax outlets reported.

The ABC wrote its own version of the story, in which it said that a tax of between $2 and $7 was being considered. In 2017, 21 per cent of Australians bought overseas products, with 38.7 million parcels worth under $1,000 imported.

The proposal is likely to have shoppers seeing red, especially since from July this year consumers will have to pay a goods-and-services tax (GST) on low-value imports from overseas. Last year the government passed laws that would extend GST to items including clothing, books, electronic devices and sports equipment, as well as online items valued at less than $1,000. This move was met with fierce opposition from online retail giants Amazon and eBay, who under the new laws will be tasked with collecting the tax for the government.

An additional $5 ‘screening tax’ would increase the cost of shopping online even further, and in some cases double the price of goods. But according to the discussion paper viewed by Fairfax, the Department of Home Affairs needs to find ways to balance its bio-security budget, which is already under a lot of pressure due to an influx in small parcels entering Australia.

“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.” the paper reads, according to Fairfax. “This has created increasing inequity and cross-subsidisation, where importers of high-value consignments are paying for the border activities attributable to other users.”

Increases in the cost of receiving postal packages are unlikely to sit well with Australians, who already complain of a substandard service from Australian Post and other parcel delivery services. A survey by consumer watchdog choice in 2015 found that half of all people surveyed who had a parcel delivered in the previous 12 months had experienced a problem with delivery.

“Topping the charts for those customers who had experienced problems was the mystery of the delivery notification card being left in the letter box even though someone was home at the time of delivery – with one in four people (24%) having experienced this problem,” Choice said. “Other problems included unreasonable delay (23%), a missing parcel or failure to deliver (14%) and the parcel being left in a vulnerable position (11%).”

Only a few months ago Australia Post customers were fuming as Christmas presents failed to arrive before Christmas day. Frustrated customers took to social media to complain about their late parcels, that in many cases had been posted in early to mid-December.

Australia Post, meanwhile, is itself grappling with increased competition in the parcel-delivery business, as international companies such as Fedex capitalise on the increasing popularity of online shopping by offering their services in Australia.

What is your opinion on our postal service? Do you usually get your parcels on time?