Rise in support from business owners for online GST reform

  • News
  • November 3, 2015
  • Elly Strang
Rise in support from business owners for online GST reform

The survey regularly interviews 1000 New Zealand SMEs and is conducted by Colmar Brunton for accounting firm MYOB.

In the retail and hospitality industry, 41 percent of those surveyed said they’d vote for an online GST to be introduced, while 31 percent were against it.

In September 2014, just 30 percent said they’d vote for it and 29 percent were against it.

Other sectors outside of retail are also growing more supportive of the initiative.

MYOB general manager of SME solutions, James Scollay, says recent publicity and more detail around the policy may be increasing small business’ support of online GST.

“Business operators are realising that lowering the GST threshold can help level the playing field for local SMEs,” Scollay says.

“However, 34 per cent of the survey respondents said they would vote against the policy, indicating the government still has some more work to do to convince everyone of the benefits.”

One of the biggest factors dividing SME owners on the issue was age.

Scollay says there is a generational divide when it comes to supporting change, with 39 percent of those who were younger (18 to 49 years) saying they would vote against adding an online GST on overseas purchases, while 27 percent would vote for it.

In contrast, 41 percent of baby boomers (50 to 69 years) and traditionalists (70+ years) said they would vote for an online GST on overseas purchases, while 31 percent were against it.

Traditionalists were the biggest supporters of online GST, with over half (54 percent) saying they’d support it.

“This difference is indicative of the online shopping habits of the younger generation of business operators,” Scollay says.

“Not only are they more inclined to source goods and materials from overseas for their business, they are unlikely to want to pay GST on consumer goods purchased from international retailers.” 

He says it’s good to see more small businesses embracing the policy, as the hope is that it’ll create a fairer system for local retailers and make more consumers buy locally.

“Although we recognise there will be some additional costs for businesses and individuals that source products online, we believe, on balance, a universally applied GST system will be positive for local businesses and the broader economy,” Scollay says.

Prime Minister John Key has previously said closing the GST loophole is a matter of when, not if, as New Zealand officials are working closely with Australian officials.

Ministers are currently preparing to consider a paper produced by Customs that explores how GST could be charged on more physical imports.

The paper was ordered in August and is yet to be made public.

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