The administration of Australia’s GST Tourist Refund Scheme is costly, labour intensive, time-consuming, paper-based and an inefficient use of scarce government resources. Reforming the scheme would both increase visitor expenditure and enhance the tourism experience.
Australia is one of only a handful of known countries with a taxpayer-funded and operated TRS (along with Indonesia, Thailand and Taiwan). According to ATO figures, the TRS costs Customs approximately $14 million per annum. Whilst we currently lag behind competitor destinations, such as Singapore, as a tourist shopping destination, Australia is well-placed to reap immediate benefits from an increase in retail shopping by travellers.
VTIC is a member of the Tourism Shopping Reform Group (TSRG), which is coordinated by KPMG. The TSRG is a coalition of Australian tourism and retail industry associations and businesses that support reforms to tourism shopping arrangements.
The TSRG proposes one key recommendation to enhance the returns of tourism shopping to the Australian economy: that the Federal Government reforms the TRS to allow competition by private refund operators. This will drive tourist shopping and product development and enable reimbursement while visitors are still in Australia.
Reform via the introduction of private refund providers would not require any amendments to TRS entitlements, such as a reduction in the minimum refund claim amount or an extension of the TRS to the purchase of services.
As part of its 2013 pre-State Budget submission, VTIC approached Minister for Tourism and Major Events Louise Asher and Treasurer Michael O’Brien with the TSR proposal. We were delighted to receive their support, with Minister Asher writing to the Federal Minister for Trade and Investment, Andrew Robb, to express Victoria’s support for the reform. It is fantastic that Victoria is taking such strong leadership on an important national policy enhancement proposal.
In addition to Victoria, the ACT has also expressed its support for the proposed TRS reforms, whilst the industry is confident that Queensland and Tasmania will also support the proposal. In an exciting development, NSW has recently formally expressed its support for the proposal.
The TRSG is now working hard to garner the support of Western Australia, South Australia and the Northern Territory, as unanimous support from all states and territories is essential to the progression of the reform agenda.