The Federal Government has backed away from a proposition to levy a fee on goods bought from overseas retailers via the internet.

The government had been considering the move in an effort to stitch back together an ever widening split in its budget. Treasurer Joe Hockey has been working with the states to lower the $1000 threshold on GST. Introducing a levy on overseas bought goods would possibly have filled the gap while the GST details were thrashed out.

But according to the Australian the Government is preferring to work out a longer-term solution with the states.

Senator Nick Xenophon believed by walking away from the tax the government had “missed an opportunity to level the playing field for small retailers, and with it supporting jobs for small businesses.”

Matt Levey, the director of campaigns and communications at Choice, reiterated that the consumer group still supported a GST. But only if it could be applied in a fair and workable manner.

“The idea that a 10 per cent price differential was going to sway people one way or antohe,” said Mr Levey, “was a bit misguided. But it’s something the local retail lobby often puts out thee.

“But we think it’s fair enough to say the GST should apply equally. The problem was all the associated costs and red tape that would come with applying the GST in places where Australia doesn’t have jurisdiction.”

And he’s not kidding!

According to a number of investigations the costs associated with collecting the tax are likely to exceed the amount collected.

And while the government expect those costs to reduce as technology improves they’re leaving the idea alone for now.

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