RBA calls retailers out over online spending claims
(4 February 2010 – Australia) The Reserve Bank of Australia (RBA) has rubbished claims by retailers that offshore online sellers, who avoid GST, are undermining their profits.
The central bank hit back at claims saying the use of Australia credit cards to buy goods and services overseas in nominal compared with local spending, and that the bulk is accounted for by Australian’s travelling abroad.
Retailers have been calling for a lowering in the $1000 threshold at which overseas purchases are liable for GST to counter what they claim is unfair competition.
The bank collects data from financial institutions about credit card spending.
This shows that spending online with Australian merchants is now about 10 percent of total spending with credit and debit cards. The largest share of this is likely to be travel and payment of utility bills.
The bank says spending on credit and debit cards overseas has been growing rapidly, rising at 15.5 percent since 2005, compared with 10 percent growth in domestic online credit card purchases.
However, the bank says It is likely that much of this growth in international purchases reflects the significant increase in the number of Australians travelling overseas.'
Last year, Australians made 6.25 million trips overseas, up 55 percent from five years ago. The stronger dollar has made foreign goods cheaper.
The RBA said although it was not possible to identify online offshore purchases, 'the data suggest that the share of this type of purchase in total spending remains relatively low'.
It said items posted overseas and delivered by Australia Post had been rising at 10 percent a year since 2005, compared with an average annual decline of 1 per cent in local mail.
Retailers have been calling for a lowering in the $1000 threshold at which overseas purchases are liable for GST to counter what they claim is unfair competition.
The bank collects data from financial institutions about credit card spending.
This shows that spending online with Australian merchants is now about 10 percent of total spending with credit and debit cards. The largest share of this is likely to be travel and payment of utility bills.
The bank says spending on credit and debit cards overseas has been growing rapidly, rising at 15.5 percent since 2005, compared with 10 percent growth in domestic online credit card purchases.
However, the bank says It is likely that much of this growth in international purchases reflects the significant increase in the number of Australians travelling overseas.'
Last year, Australians made 6.25 million trips overseas, up 55 percent from five years ago. The stronger dollar has made foreign goods cheaper.
The RBA said although it was not possible to identify online offshore purchases, 'the data suggest that the share of this type of purchase in total spending remains relatively low'.
It said items posted overseas and delivered by Australia Post had been rising at 10 percent a year since 2005, compared with an average annual decline of 1 per cent in local mail.