GST on online imports will 'clog up' deliveries, says DHL boss

Online shoppers should be treated the same as airline passengers, who can claim most of their personal overseas purchases as duty free, says one of the world's biggest mail and logistics companies.

Gary Edstein, chief executive of DHL Express Oceania, has cautioned Treasurer Joe Hockey about scrapping the $1000 tax-free threshold for online imports, saying the move could "clog up" deliveries.

Mr Edstein also defended the tax-funded mail agency, Australia Post, which is spending up to $190 million slashing almost 2000 jobs in response to a diving volume of letters.

Advertisement Mr Edstein said the company was a "frenemy" and the country needed a public postie to service all Australians.

"I don't think we are going to be in Oodnadatta in the immediate future," said Mr Edstein, despite DHL's fast growing operations here, which include a new $20 million freight processing centre at Melbourne Airport.

"There is definitely a strong position for Australia Post to grow and prosper."

Mr Hockey, who is reviewing the GST with the states, said last month that the tax could be applied to all items bought online from overseas, no matter how little they cost.

But Mr Edstein fears such an approach will "clog up" international trade.

"We are obviously concerned that are considering taking it down to zero," Mr Edstein said.

"We don't want to see this issue of clogging up the border and putting more cost at the border.

"We'd rather see that processed streamlined more so. We want to facilitate trade."

Mr Hockey has suggested collecting GST at the source, such as Amazon and other global e-commerce giants, rather than from customers at the borders.

Although Mr Edstein said that would be the ideal model, he wasn't convinced it would work.

"From what we see, we are not 100 per cent sure whether they are going to be able to collect it at source. You have obviously got to negotiate different tax treaties etc with these organisations."

Instead Mr Edstein suggested that international online parcels have the same duty free treatment as goods bought physically overseas and brought back in air luggage.

According to the immigration department, most personal items such as new clothing, footwear and personal hygiene and grooming products can be brought into the country with your baggage tax free.

General goods such as electronic equipment, cameras, perfumes and watches, are tax free to the value of $900.

"Our position as an industry is that we should align it with the duty free threshold for passengers. Treat it similarly to that," said Mr Edstein.

"We are also seeing other countries that are increasing there threshold." Research from Switzerland's HEC University of Lausanne in 2014 recommended the tax free threshold on overseas parcels imported to the European Union should be lifted from 22 euro ($33) to 80 euro ($120).

The research cited a taxation report from the European Commission, which found: "consignments falling between 22 and 150 euro in value create an unnecessary burden for both customs administrations and parcel operators/couriers".

"Furthermore, anticipated increases in international trade and freight volumes, together with lower operational costs (and potentially lower fees to their customers) will facilitate the development and market expansion of the whole sector," the report found.

Mr Edstein called on the three-year term for the federal government to be lifted to four or five years to allow political leaders time to implement genuine reform and escape the short-term goals of governing until the next election.

"As soon as they get into government they try to push through major political reform… and by the time they attempt to do that they are in election mode, so to me it's just too short," Mr Edstein said.