Impact of Online Shopping Tax on Australian Consumers and Retailers

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Question 1
According to the article, I strongly agree that the Aussie consumers are highly punished by
the online shopping laws imposed by the turnbull government as stated by the Australian
taxpayer alliance. The government has also denied the local shoppers access to variety of
products and services available and yet allow international shoppers to access the same type
of products. Such laws punish the consumers both directly or indirectly since it affects the
economy as a whole in the long run. According to classical economic theory, it states that
each person always maximizes on their preferred functions or activities they consider
important despite the difficulties they encounter. Where in this case, the Aussie consumers
have to struggle in order to access the products they need locally, despite the high cost due to
high taxation cost imposed by the government for various products of its online companies,
Roberts (2011)
The companies have to adhere to the laws so as to last longer in the online shopping industry.
The companies only survive in the industry by charging its products at a slightly higher cost
compared to other online shopping companies outside Australia. The economy on the other
hand will be affected since not all Aussie consumer strain to get products locally which are
expensive, but prefer to purchase the products from other countries like the US and pay for
shipping cost. This results to more tax being paid to other countries which in the end lowers
the economic growth of Australia. That is because demand of products goes down and the
country ends up experiencing surplus.

Supply and Demand
P= Price
D= Demand
Q= Quantity
S= Supply
The classical theorist also believes that, for an economy to remain stable, the government
should completely stay out of it. The government should not interfere with monetary value by
imposing strict monetary policies that in the long run will result in price and wages
instability. This is because current markets are very competitive, and any slight interference