A report commissioned by the Australian government has called for a raft of workplace law changes but stopped short of recommending trade protectionism mechanisms demanded by the major retailers.
Australian retailers are unhappy with the current situation which allows for an exemption from the VAT-like GST (10%) for imports under $1,000.
The massive disparity between retail chain prices and overseas online prices, slow start to local etail and the import-friendly tax laws have all been blamed as contributing to the worst retail slump in 50 years.
The Productivity Commission report found that the GST threshold was not a major factor in the Australian consumer stampede towards online shopping but said that retail industry had "lower levels of productivity when compared internationally."
The report also found that Australian retail faced high costs due to restrictive trading hours and workplace laws and called for a review of the respective laws nationwide.
The commission warned Australian retailers that they needed to become more competitive and move to take advantage of internet shopping.