Online shopping brings in $7.6b under $1000 GST-free threshold Outspoken: Gerry Harvey has been a vocal opponent of online shopping from overseas companies. Retailers have stepped up their call for the removal of the $1000 GST-free threshold for imports, after new figures showed Australians spent more than $7 billion on shopping at overseas online shops during the 2012-13 financial year. The Bureau of Statistics figures - released yesterday as part of Australia's trade balance data for August - showed that the total value of low-value threshold (LVT) imports from overseas retailers totalled $7.61 billion, helping to push the trade deficit further into the red. About 88 to 95 per cent of the spending was estimated to be for consumer goods, the bureau added. "In annual terms, overseas purchases of goods are rising at a 20 per cent annual pace, well above the 3 per cent pace of domestic retail spending," Commsec chief economist Craig James said. Total retail sales is estimated to be about $260 billion. The new figures were larger than existing projections on how much consumers spend at overseas online retailers, Australian Retailers Association (ARA) executive director Russell Zimmerman said. The concern isn't that people are spending money online - either locally or overseas. The concern is that it's not a level-playing field," Mr Zimmerman said. We believe that the firm of online [shopping] generally will grow, and as that figure grows, there will be a bigger loss of income to the states and territories if they don't do something about the low-value threshold. Australian retailers have struggled with subdued retail spending and consumer confidence in recent years, with some of the industry's leaders blaming tough trading conditions and online shopping for their weak results. But Barclays' chief economist Kieran Davies said while offshore online buying had grown by 15 per cent over the past year, such purchases made up only 3 per cent of domestic retail sales. "Adding this to domestic retail sales does not change the picture of sluggish spending on retail goods in recent years as it only lifts annual growth from 2 per cent to 2.3 per cent," Mr Davies said in a research note today. Consequently, clamping down on foreign competition is unlikely to be the panacea imagined by domestic retailers. Australians have been spending more on overseas internet purchases, citing the lower prices, greater range of goods and services available, and the speed of delivery as some of the central reasons. The strength of the Australian currency, which saw it hover above parity with the US dollar for two years before shedding more than 10 per of its value since mid-April, has also been seen as a key driver. At the same time, local bricks-and-mortar businesses have been accused of dragging their feet on implementing multi-channel retailing options for consumers. Harvey Norman chief executive Gerry Harvey said the new calculations gave credence to his warnings several years ago that internet shopping was changing the retail environment, especially for fashion outlets and smaller businesses. "It's huge and it doesn't surprise you because every second Australian buys something online overseas," Mr Harvey said. Retailers have been going on about this for some years now, telling government what's going to happen, but the government has just ignored it totally and it was always going to come back and bite. JP Morgan's Ben Jarman said the new figures helped to fill a "black hole" in data collection on online shopping. It tells us that the consumer has been spending more than we thought, but all that spending has been leaking to the rest of the world. Mr Jarman said the data helped explain the weaker profits of some local retailers, and would also weighed on the current account deficit and household savings data. On Tuesday, new data released showed that retail sales rose by 0.4 per cent in August, surpassing economists' expectations of a 0.3 per cent rise, on the back of strong sales in department stores. Internet spending slipped a seasonally adjusted 0.1 per cent in August, according to the National Australia Bank's online sales index released on Monday.