Australia Post's ShopMate, GST on low-value offshore purchases and NDIS disability market stewardship

I have been a customer of Australia Post’s ShopMate service since 2016. It is a great, trackable way to get purchases from retailers in the United States at a predictable cost in Australian dollars.  Last week, however, Australia Post advised that they would be charging GST on low-value purchases (i.e. purchases under $AUD1,000) sent through ShopMate.  

Here’s Australia Post’s email to me:
This move by Australia Post is not unexpected.  The Australian federal government has been debating for some time to apply GST to offshore purchases under $AUD1,000, at the behest of local retailers to ‘level the playing field’, even though the cost of collecting GST on these purchases is considered to be greater than the amount that will be returned to the government.  (If you like, the difference could be called the HNS aka the ‘Harvey Norman Subsidy’.)  

Nevertheless, it is still a blow for me.  ShopMate facilitates purchases for me from US disability and other retailers who do not offer shipping to Australia.  ShopMate provides its customers with a US mailing address, from which it collects your parcels and forwards them to your nominated Australian address.  

Addition of GST would ordinarily not be a deal-breaker for me, except Australia Post’s cumbersome business process for proving the value of purchases will slow down the delivery of goods by days, GST would not apply in Australia to many of my purchases (medical and disability equipment are GST exempt), but more importantly, ShopMate has competitors who will not charge GST, e.g. MyUS.com.

Before I go on, here’s a disclaimer. I am a person with a disability, who works full-time and earns a good income. This gives me choices that other people with disabilities do not have. I am acutely consciously that employment makes me privileged.  (Moment of insight: this is probably the reason I work my little crip arse off too.)

What do I purchase from the US? 

Shoes: Due to my disability, I have teeny-weeny feet.  They are roughly a little kids’ size 13, but somewhat oddly shaped.  It is really hard to find good quality shoes in Australia that both fit AND look like adult shoes.  After all, I need reasonably professional looking shoes for work - UGG Boots won’t cut the mustard.  Online retailers in the US like Zappos have a huge range of shoes in kids’ sizes, in well-known and less-known brands.  In some cases, brands that sell in Australia like Columbia, do not sell kids’ sizes in Australia.  Buying shoes online is obviously risky because you cannot try them on, but so far, I have been lucky.  Pictures of shoes from multiple angles help a lot to determine whether the shoes will fit.

Adaptive clothing: Before they closed, Canadian designer Izzy Camilleri sold lovely clothing for a seated frame through her IZ Collection line.  My pair of IZ jeans are one of my favourite things in my wardrobe.  Strictly speaking, these were Canadian purchases, but she offered free / cheap postage within North America, that made ShopMate a good choice to bring these purchases the rest of the way to Australia.

Disability equipment / wheelchair accessories: Here's a few examples of US purchases:

Transfer boards - ADI makes lightweight, durable anti-slip transfer boards that do not look like something that belongs in a nursing home. Also, their pricing is really good at $US46 for a 29 inch transfer board.  A similar product in Australia costs $139 plus $15 for shipping.  

Wheelchair bag - I bought the Bodypoint Mobility Bag through 1800Wheelchair.com.  It is not revolutionary, but is a neat-and-tidy bag that sits unobtrusively under your wheelchair seat.  Permobil distribute this product in Australia, but do not advertise any prices online and do not appear to have any online purchase channels.

Freewheel - The Freewheel is an attachable front wheel for manual wheelchairs that allows you to travel more easily over rough or uneven ground.  I had been considering one of these for a long time, especially for travel to Europe again (one day) to make cobbled footpaths easier to manage, but it was actually a forthcoming trip to Tasmania and Port Arthur that got me over the line to purchase.  

This product comes standard with a pneumatic tyre, but a solid tyre is an option available at extra cost.  I have not had pneumatic tyres on my wheelchair for many years.  Solid tyres, in my opinion, are one of the greatest things to happen to wheelchairs.  For my use, a solid tyre on the Freewheel was essential.  

Again Permobil distribute this product in Australia, but do not advertise any prices online.  I inquired with the local Permobil distributor, and their quoted price was good, but they could not supply a Freewheel with a solid tyre before my trip (they had none in the country), and prices would rise before they could supply the Freewheel with a solid tyre.

So I purchased the Freewheel through Living Spinal. FYI their customer service was excellent - they bent over backwards to facilitate an offshore purchase with a 'foreign' credit card.  I suspect their system was actually set up to prevent the Freewheel being sold outside the US, consistent with an exclusive distribution agreement. But hey ... whatever.

P.S. I negotiated with the local Permobil distributor for them to setup the Freewheel.  It cost $72.

Why do I purchase from the US? 

It is undeniable that prices from US retailers, particularly for anything associated with disability, are often cheaper (and significantly so), even taking exchange rates and shipping into account.  But this is not a determining factor.  I prefer to buy from local distributors when I can.

Availability and ease of purchase are more important factors. There are multiple US online retailers selling disability equipment, with (generally) clear and simple websites, and decent customer service. They treat buying a Freewheel no differently from buying shoes - it’s a transaction between customer and retailer. The retailer has a vested interest in it going well, as this encourages the customer to come back. If it’s too hard to make a purchase, the customer will go elsewhere.

By contrast, some of the items purchased above were simply not available from Australian retailers, were not available when I needed them or with the options I needed, it was hard to discover how much the item would be, or just simply too hard to arrange the purchase in the absence of online channels.  For example, Permobil does not appear to publish prices on its website (even for the Bodypoint bag), and has no option for online purchasing.  However, if I want to purchase a Bodypoint bag or a Freewheel from an Australian distributor, Permobil is the only option. 

What does this mean for the NDIS? 

Thin markets are defined as markets with a low number of buyers and sellers.  Thin markets are of particular concern in areas of high-needs disability support where state governments have withdrawn from the ‘market’ as a service provider of last resort.  But even in areas of more mundane disability equipment, thin markets are still evident.  It is clear that the number of sellers for some disability products is small (e.g. Permobil is the sole retailer in Australia for some brands), and the number of buyers is also relatively small. 

Frustration with the absence of published prices, the inability to buy online (or even easily in person without taking a day off work) and the lack of a customer service culture in local disability retailers encourages me to buy smaller items offshore. But purchasing offshore provides no incentive for Australian sellers to expand or improve their services (e.g. open up new purchase channels such as online storefronts), and does little to support the expansion of Australian disability retailers. The significant combined purchasing power of NDIS participants, however, has the potential to radically change disability service markets in Australia, if NDIS participants decide to exercise that power and demand competitive and transparent pricing as well as decent customer service from the local market.

The NDIA has a very specific "role in encouraging a healthy and diverse market place for disability services and supports (market stewardship)." See NDIA market approach. With the federal government imposing constraints on offshore purchases via the extension of GST to low-value purchases, people with disabilities have a renewed interest in a strong and competitive local disability market. Disability retailers have a great opportunity to expand their businesses. Surely these interests can converge in a way that benefits everyone. In the meantime, I will be paying GST via ShopMate and/or re-opening my MyUS.com account.