Department of Home Affairs plans new tax on parcels being posted to Australia

Industry sources said after negotiations with the government, they expected a flat rate of about $5 per parcel, significantly less than the $90 levy currently charged on all deliveries worth over $1000.

"As the volume of imported low value consignments continues to grow, so too do the costs of biosecurity, cargo and trade border activities for those consignments. This has created increasing inequity and cross-subsidisation, where importers of high value consignments are paying for the border activities attributable to other users," a discussion paper dated February 2018 notes.

"Existing cost recovery arrangements are no longer sustainable and will not support Australia’s future trading environment."

The paper shows freight and express couriers would wear the bulk of the levy, along with any individuals who import more than 1000 items a year.

Freight and Trade Alliance director Paul Zalai told Fairfax Media those costs would be passed on to consumers.

"We expect the cost of the levy per parcel to be in the dollars not the cents," he said.

Online shopping is booming in Australia.

Some stakeholders believe the new levy has the potential to double the price of smaller online purchases when combined with the GST.

Applying a $5 per parcel tax would boost the budget by up to $200 million in the short-term, growing over time as more parcels arrive in Australia each year.

The plan has re-surfaced in time for the May budget, but stakeholders were first consulted more than four years ago as part of a range of potential reforms to border charges.

A spokesman for Treasurer Scott Morrison said: "We don't comment on budget speculation."

The discussion paper notes the introduction of a levy "is a decision for government" and suggests "time would be needed to introduce legislative amendments and for industry to adjust".

Comment has been sought from the Department of Home Affairs, and Home Affairs Minister Peter Dutton.

Mr Zalai warned any levy could see retaliation from countries that post goods to Australia.

"We should not be surprised if local small to medium exporters face reciprocal charges administered by foreign jurisdictions – a less than ideal outcome in an environment whereby our government is otherwise going to great lengths to remove trade barriers," he said.

"Should the levy proceed, the e-commerce sector will be looking for transparency in costs and an opportunity to co-design biosecurity and border reforms to create more efficiencies and minimise this financial burden – the worst possible outcome would be for the sector to stuck with no option but to absorb the costs of legacy systems and processes."