Christopher Adams

Christopher Adams is the Markets and Banking reporter for the New Zealand Herald

GST-free status a 'threat to jobs'

Retail job losses can be directly attributed to domestic purchases being redirected to overseas websites. Photo / Thinsktock
Retail job losses can be directly attributed to domestic purchases being redirected to overseas websites. Photo / Thinsktock

A tax loophole that is predicted to wipe out more than 30,000 Australian retail jobs over the next three years also poses a threat to businesses in this country, the New Zealand Retailers Association says.

Ernst & Young estimates in a new report that around 118,700 retail jobs across the Tasman could be lost by 2015 as a result of online competition.

According to the report, 33,400 of the losses could be directly attributed to domestic purchases being redirected to overseas websites because of the so-called low-value threshold, which makes goods bought on overseas websites for less than $1000 free of GST and other duties.

The report said the tax loophole would result in Australia missing out on between A$3.9 billion and A$6.5 billion in gross domestic product by 2015.

In this country the GST-free threshold is much lower, with most items valued under $400 not subject to tax.

However, NZ Retailers Association spokesman Russell Sinclair said the tax-free status of purchases under $400 was having a "significant economic impact" and could affect employment.

The association is putting pressure on the Government to make GST applicable to all goods purchased and Sinclair said the group had met Treasury and members of Parliament over the issue.

"We want a level playing field with all goods subject to GST regardless of source."

- NZ Herald

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