Joe Hockey's announcement about the sale of six properties has sparked debate about whether the apparent crackdown is worth the effort. Credit:Jessica Hromas The Coalition pledged no new taxes if it won government but has increased the fuel excise, income taxes on the rich and flagged its intention to charge the GST on purchases bought online worth below $1000. The Productivity Commission inquired into the issue in 2011 and said the threshold exemption is only a "minor part" of the disadvantages Australian retailers face. But it urged the threshold be "lowered significantly" to promote tax neutrality, however only once it was cost effective to do so as it "may be significant in protecting the tax base from erosion as overseas retailing continues to grow". Customs data provided to the commission estimated that in 2010-11 up to three quarters of international mail parcels were valued between $1 - $100.

The commission said reducing the threshold to $100 could raise roughly $500 million but would cost consumers and businesses $750 million in current customs processing charges and predicted the actual handling costs would be higher. "Effectively, it may cost the community over $1.2 billion to facilitate the collection of $496 million in revenue," the commission said. But Mr Hockey said agreements struck at the G20 Australia hosted in November last year, meant the cost of imposing the GST on goods bought from overseas would be less. "The dynamics have changed," Mr Hockey told the ABC. "Previously the challenge was how do you impose the GST when it comes across our borders into Australia – that was going to be incredibly clumsy and logistically a nightmare," he said.

But Mr Hockey said laws passed in other countries as a result of the G20 meant that the Australian government could force suppliers abroad to apply the tax themselves. "So now we can go to the Amazons, we can go to the various retailers overseas and say you have to apply the GST to goods that you selling into the Australian market and they will do so, that's how we're going to collect it," he said. In the same interview Mr Hockey said he wants more information on a so-called "Buffett Tax", which would create a minimum tax rate levied on the total incomes of the wealthy. It is aimed at preventing the rich from using a variety of tax deductions to minimise their obligations. Delegates at the Labor Party conference on the weekend voted in favour of calling on a future Labor government to consider such a tax.



Mr Hockey said on Monday the government would look at the idea as part of its white paper into taxation. "Well it depends how it's structured," he said. "I want to find out more about it, because the bottom line is of course Labor had six years to deal with it, they didn't. Right, okay, they've raised it now, I'm happy to look at it," he said.

In his speech to the ALP national conference seconding the motion, Labor frontbencher Anthony Albanese cited Australian Tax Office figures showing three-quarters of Australians earning more than $1 million per year paid no tax. "That is simply unacceptable," Mr Albanese told delegates.

"That means that the burden of tax paid by those working men and women who are PAYG tax earners, are the people who are doing the heavy lifting," he said. Mr Hockey said it was important to get the balance right because 50 per cent of all income tax is paid for by ten per cent of the population and upsetting the balance could encourage the wealthy to move abroad. He reiterated the importance of addressing bracket creep – where middle incomes get pushed into higher tax brackets over time – because they act as a disincentive to the people on middle incomes to earn more. "I don't want to see tax reform simply end up as tax increases," he said. The Coalition is not ruling out increasing the GST after the next election in return for what Prime Minister Tony Abbott describes as a "more rational" tax system.