Amazon.com to block Australian consumers from global e-commerce sites, fate for New Zealanders unknown
Restrictions mean Australians, and possibly New Zealand consumers, will have access to a much smaller product range
By Aimee Shaw
Amazon is set to block Australian consumers from using its global e-commerce sites including its flagship Amazon.com as the Australian Government clamps down on international firms selling low-value goods without filing GST.
From next month, when Australia implements collection of GST on low-value goods, the e-commerce giant will restrict shoppers meaning they will only be able to purchase goods from its local domain, blocking shipping from other countries.
It is unknown what impact this will have on New Zealanders using Amazon Australia and its other Amazon sites. The Herald has approached the online retailer for comment.
Retail consultant Chris Wilkinson said the restrictions for Australian consumers would likely speed up the process of Amazon launching a local presence and opening distribution centres in New Zealand.
“It’s likely they will adopt a similar strategy with New Zealand consumers in forcing them through a local site when the rule change takes place,” Wilkinson said.
“What will be interesting to see is how Australian retailers, selling into New Zealand manage the upcoming changes. There are a large number of Australia-New Zealand transactions taking place currently, many for products also available locally.”
The restrictions mean Australians will have access to a much smaller product range and only able to purchase goods held locally at the Melbourne distribution centre, and prices could increase.
Consumers will soon have access to around 64 million products locally from half a billion globally.
“Online customers will end up having to find other solutions if they are geo-fenced from accessing the US sites, however, we don’t think this will have a transformational effect on Australian retailers’ performance,” Wilkinson said.
Australian Taxpayers’ Alliance policy director Satya Marar said Amazon restricting its Australian customers was a warning for New Zealand.
“The Australian Government’s online shopping tax denies shoppers and families the same consumer choice available to billions of shoppers worldwide,” Marar said. “If this happens in New Zealand, Kiwis will be denied access to about 500 million products, most of which are unavailable locally.”
Last year an Australian Senate committee inquiry found an online shopping tax would not make Australian retailers competitive and the cost of implementing the tax would force major online platforms to exit the market.
“Now we see these consequences in action,” Marar said.
“New Zealand faces the same risk as it introduces its own Amazon tax. The Government wouldn’t need to assist domestic retailers with taxes on overseas competitors if it addressed local pressures such as zoning laws, strict labour regulations and red tape.”
Retail NZ general manager of public affairs Greg Harford said the announcement was a surprise.
“We know that Amazon has never wanted to register to Australian GST,” he said.
“There will be some that see it as a massive global corporation throwing a tantrum because it doesn’t want to meet its tax obligations in Australia but really we see it as more a question about strategy on their online retail market.”
Amazon was already paying VAT in the UK and EU, and so the decision to not comply Down Under was a deliberate choice, Harford said.
“It’s important to note that even on the Amazon US website there is already a very large number of products that aren’t shipped to Australia and New Zealand.”
Harford said he believed Amazon would service New Zealand out of Australia.
“There’s no question that Amazon could comply with GST registration requirements if it wanted to. It’s a huge global business with a turnover of two and a half times the size of the entire New Zealand retail sector and it should already be registered for GST here in New Zealand.”
From October next year, New Zealand will implement the same GST legislation as Australia, requiring international companies selling to NEw Zealand online to collect and pay GST to Inland Revenue.
The tax will be on products under NZ$400 (US$280). Anything above NZ$400 already attracts duties.
A spokeswoman for revenue minister Stuart Nash’s office said it was not clear if Amazon’s decision to block Australian consumers from its global sites was “entirely due to the GST law change in Australia”.
“The decision may be partly a marketing strategy related to the launch of Amazon’s ‘global store’ which is now available on the Australian website and which offers a range of new products to Australian customers,” she said.
Amazon is expanding its presence in Australia. It is currently building a second distribution centre in Sydney, planned to open later in the year.