1 May 2018

GST to be imposed on foreign online retailers - Ardern

9:56 am on 1 May 2018

Prime Minister Jacinda Ardern has said "fairer" GST will be applied to international retailers ahead of the government's policy announcement this morning.

Prime Minister Jacinda Ardern in the RNZ Auckland studio for Morning Report. 30 October 2017.

Photo: RNZ / Claire Eastham-Farrelly

Speaking to Morning Report, Ms Ardern said they were expecting an announcement at 11.30am today on the policy.

"Yes we do ... some people may not know but certainly small businesses do in New Zealand GST applies to them but it doesn't apply to international retailers online for purchases under $400."

Anything above $400 already attracts duties.

"Announcing at 11.30, but you can take that as an indication that we want to make it fairer and we will be."

Finance Minister Grant Robertson in November had to rein in expectations the tax change would be imposed early on, after Revenue Minister Stuart Nash signalled the move.

Australia had also been planning to collect tax on low-value online goods from last July, but delayed implementation to July this year as it struggled to work out the practicalities.

Retail New Zealand public affairs manager Greg Harford said the announcement would be "very good news indeed for the sector".

He said New Zealand retailers were facing an automatic price disadvantage of at least 15 percent and in some cases substantially more.

"Typically if a product is worth less than $400 and you're buying it on the likes of Amazon, that product can come into the country and not have GST or duty collected on it.

"Some products still have sort of a five or 10 percent tariff on it as well and that's a real issue for the competitiveness of the retail sector.

GP visit announcement within weeks - Ardern

Ms Ardern also spoke about expectations for the upcoming Budget and the challenges the government was facing in balancing unexpected costs with its spending promises.

The Labour Party promised to cut fees to visit GPs by $10 a visit on 1 July, but the Health Minister said this week the move would have to be phased in over time.

As pressure ramps up ahead of this month's Budget, and the government facing some unexpected costs, keeping the balance as well as all the spending proposed seems a tall order.

Ms Ardern said announcements would be made within a couple of weeks around making GP visits more accessible, but said the phasing-in of the GP visits move had been signalled.

"Making sure that we are managing our debt levels and our spending levels is one way we can make sure that we have a resilient economy and a resilient government through those unpredictable shocks," she said.

She said the government was facing six-fold increases in DHB deficit levels since September.

"That just points to the fact that the health budget itself is significant as well and has been growing ... that leads to a wider set of questions around the nature of our health budget - ageing population, increases in technology.

"When you're running a DHB any deficit is troubling, it means you defer things like capital maintenance as we've seen in places like Counties Manukau, and it is something that any responsible government needs to address which is what we're seeking to do in this Budget."

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