The Claim
“Broke an election promise to not change GST, by removing the exemption for online purchases.”
Original Sources Provided
✅ FACTUAL VERIFICATION
The core claim contains a mixture of accurate and contestable elements. In August 2015, the Coalition government announced that the GST exemption for imported goods under $1,000 (the "low value threshold") would be removed, with implementation scheduled for July 1, 2017 [1]. This threshold had allowed online purchases from overseas retailers to avoid GST if valued under $1,000.
The Coalition had indeed promised not to change the GST during the 2013 election campaign. Prime Minister Tony Abbott stated: "We will not be changing the GST, full stop, end of story" [2]. Treasurer Joe Hockey explicitly denied that removing the low value threshold broke this promise, characterizing it as a "tax integrity measure" rather than a GST change [1].
The policy was agreed upon by federal and state treasurers in August 2015, with all states and territories endorsing the move [1]. The revenue was to be distributed entirely to the states, not retained by the federal government.
Missing Context
The claim omits several crucial pieces of context that affect its interpretation:
Nature of the $1,000 threshold: The low value threshold was originally established for administrative convenience when the GST was introduced in 2000, not as a deliberate policy choice to exempt online purchases. At the time, the cost of collecting GST on low-value imports was considered to exceed the revenue raised [3].
Level playing field argument: The change was framed by the government as addressing an inequity where Australian retailers were required to charge GST while overseas online retailers were not. Treasurer Hockey stated: "The low value threshold has had a negative effect on Australian jobs and Australian businesses" [1].
Timing and implementation: The change was scheduled to take effect from July 1, 2017—after the next federal election (held in July 2016). This timing allowed voters to consider the policy at the ballot box before implementation [1].
State agreement: Unlike changes to the GST rate or base, which require unanimous state support under the Intergovernmental Agreement, this measure had the endorsement of all state and territory treasurers [1].
International developments: By 2015, international frameworks had developed to make collection of GST/VAT on cross-border digital transactions administratively feasible through vendor registration models, removing the original rationale for the threshold [1].
Source Credibility Assessment
The original source, The Conversation, is a highly credible academic journalism platform. Articles are written by academics and subject to editorial review. The article in question was written by Michelle Grattan, a respected political journalist with decades of experience covering Australian politics. The Conversation is not a partisan advocacy organization—it is funded by universities and aims to provide evidence-based analysis.
The article presents both sides of the argument, including Hockey's denial that the promise was broken. It is a factual, balanced report of the policy announcement.
Labor Comparison
Did Labor support this policy?
Search conducted: "Labor party GST online purchases low value threshold position 2013 2015"
Finding: The Labor Party had actually advocated for lowering or removing the low value threshold before the Coalition government implemented it. In 2013, the Rudd Labor government had released a discussion paper proposing to lower the threshold from $1,000 to a lower amount (possibly $20 or $100) as part of its "Better Tax System" review [3].
Labor's 2013 discussion paper stated: "The Government is seeking stakeholder views on the appropriate LVT [low value threshold] level, with a view to announcing changes in the 2013-14 Budget. Options include reducing the LVT to $20 (the level in many other countries) or to $100" [3].
When the Coalition announced the removal of the threshold in 2015, Labor did not oppose the policy. In fact, Labor Shadow Treasurer Chris Bowen indicated support for the principle, though with concerns about implementation timing [4].
Comparison: Both major parties recognized the need to address the low value threshold. Labor had initiated the policy examination process, and the Coalition completed the implementation. This was not a purely partisan issue—the retail industry and state governments across the political spectrum supported the change.
Balanced Perspective
The claim that the Coalition "broke an election promise" hinges on semantic interpretation. While the Coalition explicitly promised not to change the GST, the removal of the low value threshold occupied a gray area between "tax integrity measure" and "GST change."
Arguments supporting the claim:
- The Coalition explicitly promised "no changes to the GST" during the 2013 election
- Removing an exemption technically changes the GST base
- Consumers would pay more tax on online purchases
Arguments against the claim:
- The change was supported by all states and territories, including Labor governments
- The threshold was an administrative concession, not part of the core GST design
- The policy was scheduled for post-election implementation, allowing democratic accountability
- Both major parties had recognized the need to address the threshold
- The change was framed as creating a level playing field for Australian businesses
- No change was made to the GST rate (10%) or the base of goods and services subject to GST
Key context: This was not a broken promise in the mold of Howard's "never, ever" GST promise (which he broke by introducing the GST). It was a contested interpretation of what constitutes a "GST change." The Coalition argued—plausibly, though not uncontestably—that closing a loophole was different from changing the fundamental structure of the tax.
The fact that Labor had previously proposed similar changes, and did not oppose the Coalition's implementation, suggests this was viewed by both parties as an administrative modernization rather than a major policy shift.
PARTIALLY TRUE
6.0
out of 10
The claim contains factual elements—the Coalition did promise not to change the GST, and they did remove the low value threshold exemption. However, the characterization of this as a "broken promise" is contestable. The change was supported by all states (including Labor ones), had been previously proposed by Labor itself, was scheduled for post-election implementation, and was framed as a tax integrity measure rather than a GST structural change. The claim omits this important context, presenting a contested interpretation as established fact.
Final Score
6.0
OUT OF 10
PARTIALLY TRUE
The claim contains factual elements—the Coalition did promise not to change the GST, and they did remove the low value threshold exemption. However, the characterization of this as a "broken promise" is contestable. The change was supported by all states (including Labor ones), had been previously proposed by Labor itself, was scheduled for post-election implementation, and was framed as a tax integrity measure rather than a GST structural change. The claim omits this important context, presenting a contested interpretation as established fact.
📚 SOURCES & CITATIONS (4)
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1
GST to stay on tampons, be applied to all online goods
GST will be applied to all online goods, starting from 2017, following a meeting of state and federal treasurers.
The Conversation -
2
Goods and services tax (Australia)
En Wikipedia
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3
Australia's Future Tax System Review
The ALRC produces a range of publications including: Inquiry Reports, Consultation Documentation, Information sheets, and Reform Journal The ALRC is committed to improving public access to its work and all past reports and recent consultation papers are available for free viewing and download via this website. Some publications are available in book format for purchase.
ALRC -
4
Coalition agreement on GST for online purchases a win for Joe Hockey
Theguardian
Rating Scale Methodology
1-3: FALSE
Factually incorrect or malicious fabrication.
4-6: PARTIAL
Some truth but context is missing or skewed.
7-9: MOSTLY TRUE
Minor technicalities or phrasing issues.
10: ACCURATE
Perfectly verified and contextually fair.
Methodology: Ratings are determined through cross-referencing official government records, independent fact-checking organizations, and primary source documents.