AUSTRALIA'S biggest retail lobby group has scathingly attacked Australia Post action that it believes helps offshore online retailers at the expense of local shops and jobs.

In a submission to the Productivity Commission, the National Retail Association also singled out Visa and eBay for their stance on the shaky Australian retail sector, arguing Visa's position that it could not collect GST on online purchases was driven by self-interest.

Australia's biggest retail lobby group has attacked Australia Post for action it believes helps overseas retailers at the expense of local shops. Credit:Ben Rushton

The association, which represents big retail chains such as Target, Myer and Country Road, dismissed submissions to the inquiry that argued the cost of collecting GST on incoming goods worth less than $1000 would exceed any tax revenue.

This month, the Productivity Commission said in a draft report that the GST threshold should be reduced for reasons of ''tax neutrality'', but only once it could be done cost-effectively. It judged - to retailers' disappointment - that the GST-free threshold was only a ''minor part of the competition story''.