Infrastructure and the long-running saga over GST on foreign online goods will be on the agenda when the nation’s treasurers meet on Friday.
Federal Treasurer Joe Hockey will host the gathering of his state and territory counterparts in Canberra, the outcome of which will help him form his first budget on May 13.
Infrastructure has formed the main platform of the federal government’s first term, in what Prime Minster Tony Abbott has described as unclogging the arteries of the economy.
Mr Hockey has already had conversations with his state counterparts about incentive measures to encourage them to sell state assets and recycle that capital into productivity-enhancing infrastructure investments.
Retailers will be hoping the treasurers resolve the issue of the GST threshold which allows foreign goods valued below $1000 to be exempt of the impost, a ruling that has been in place for more than a decade and introduced before online shopping existed.
Groups like the Australian National Retailers Association want the threshold lowered to $20 to bring it in line with other countries like Canada.
The treasurers appeared to be close to resolving the issue when they last met in November.
However, a report into tax administration released on Thursday by the federal house tax committee again highlighted the issues that have delayed any change.
Foreign suppliers of goods are not required to register for GST and a majority of low value imports also cost less than $100.
“Given these circumstances, the cost of collecting GST on these goods would be greater than the revenue realised,” the report said, quoting Taxation Commissioner Chris Jordan.
Those goods that currently attract the GST are reliant on Customs contacting the purchaser to arrange GST payments, and these goods are held by Australia Post until duty, taxes and charges are paid in full.
Extending this model for low value goods would have “significant compliance and warehousing costs”, it said.
On the GST more broadly, Victorian Treasurer Michael O’Brien will tell Mr Hockey the current system of carving up the revenue is unfair and that his state is being “dudded”.
“This is fundamentally an unfair system,” he told reporters in Melbourne.
“Victoria is a large state, a growing state, we need our fair share of GST, that’s not happening at the moment.”